2 October 2014 Dahlia Zawawi, Ph.D.

1
 SvenskaHandelsbanken

SvenskaHandelsbanken relies on prudent reward systems, offers

employee jobs with high motivation potential, expects staff to manage
themselves, and delegates power to branches, resulting in high levels
of employee empowerment and performance.

2 October 2014 Dahlia Zawawi, Ph.D. 2

Financial Reward Practices
Financial rewards -- fundamental part of
employment relationship
Pay has multiple meanings
symbol of success
reinforcer and motivator
reflection of performance
can reduce anxiety
Men value money more than women
Cultural values influence the meaning
and value of money
Corel Corp. With permission.

2 October 2014 Dahlia Zawawi, Ph.D. 3

Types of Rewards in the Workplace

Membership and seniority

Job status
Competencies

Performance-based

Corel Corp. With permission.

2 October 2014 Dahlia Zawawi, Ph.D. 4

 Total Compensation

Direct Indirect

Wages / Salaries Time Not Worked

Vacations
Breaks
Holidays
Commissions
Insurance Plans
Bonuses Medical
Dental
Life
Gainsharing
Security Plans
Pensions

Employee Services
Educational assistance
Recreational programs

2 October 2014 Dahlia Zawawi, Ph.D. 5

 cell phones
car allowance
company car
supplemental life insurance
voluntary deferred compensation programs
annual physical exam
supplemental disability program
club membership(s)
supplemental executive retirement plans
supplemental medical insurance
legal counseling
post-retirement insurance
supplemental vacations
airline VIP lounge membership
dependent tuition reimbursement

2 October 2014 Dahlia Zawawi, Ph.D. 6

Compensation Vehicles Utilized in a Customized
Benefit Plans Compensation Approach
Accidental death, dismemberment
insurance
Birthdays (vacation)
Bonus eligibility
Business and professional membership
Cash profit sharing
Club memberships
Commissions
Company medical assistance
Company-provided automobile
Company-provided housing
Company-provided or subsidized
travel
Day care centers
Deferred bonus
Deferred compensation plan
Dental and eye care insurance
Discount on company products
Education costs
Educational activities (time off)
Free checking account
Free or subsidized lunches
Group automobile insurance
Group homeowners insurance
Group life insurance
2 October 2014
Health maintenance organization fees
Home health care
Hospital-surgical-medical insurance
Incentive growth fund
Interest-free loans
Long-term disability benefit
Matching educational donations
Nurseries
Nursing home care
Outside medical services
Personal accident insurance
Price discount plan
Recreation facilities
Resort facilities
Sabbatical leaves
Salary continuation
Savings plan
Scholarships for dependents
Severance pay
Sickness and accident insurance
Stock appreciation rights
Stock bonus plan
Stock purchase plan
Dahlia Zawawi, Ph.D. 7
Nonfinancial Compensation
The Job Job Environment
Skill Variety Task Sound Policies
Identify Task Competent Employees
Significance Congenial Coworkers
Autonomy Suitable Status Symbols
Feedback Working Conditions
Workplace Flexibility
Flextime
Compressed Workweek
Job Sharing
Customized Benefit Plans
Telecommuting
More Work, Fewer Hours
Part-time Work
2 October 2014 Dahlia Zawawi, Ph.D. 8
Membership/Seniority Based
Rewards
Fixed wages, seniority increases
Advantages
Guaranteed wages may attract job
applicants
Seniority-based rewards reduce turnover
Disadvantages
Doesnt motivate job performance
Discourages poor performers from leaving
May act as golden handcuffs (tie people to
the job)

2 October 2014 Dahlia Zawawi, Ph.D. 9

Job Status-Based Rewards
Includes job evaluation and status perks
Advantages:
Job evaluation tries to maintain pay equity
Motivates competition for promotions
Disadvantages:
Employees exaggerate duties, hoard
resources
Reinforces status, hierarchy
Inconsistent with workplace flexibility

2 October 2014 Dahlia Zawawi, Ph.D. 10

Competency-Based Rewards
Pay increases with competencies
acquired and demonstrated
Skill-based pay
Pay increases with skill modules learned
Advantages
More flexible work force, better quality,
consistent with employability
Disadvantages
Potentially subjective, higher training costs

2 October 2014 Dahlia Zawawi, Ph.D. 11

Reward Practices at Nucor

Courtesy Nucor

Nucor has survived and thrived in the turbulent steel

industry by motivating employees with team-based
and organizational-based rewards.
Performance-Based Rewards

Profit sharing
Organizational Share ownership
rewards Stock options
Balanced scorecard

Team Bonuses
rewards Gainsharing

Bonuses
Individual Commissions
rewards Piece rate

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Evaluating Organizational Rewards
Positive effects
Creates an ownership culture
Adjusts pay with firm's prosperity
Scorecards align rewards with several specific organizational
outcomes

Concerns with performance pay

Weak connection between individual effort and rewards
Reward amounts affected by external forces

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Improving Reward Effectiveness
Link rewards to performance

Ensure rewards are relevant

Team rewards for interdependent

jobs

Ensure rewards are valued

Watch out for unintended

consequences

2 October 2014 Dahlia Zawawi, Ph.D. 15

Job Design
Assigning tasks to a job,
including the
interdependency of those
tasks with other jobs

Organization's goal -- to
create jobs that can be
performed efficiently yet
employees are motivated
and engaged

2 October 2014 Dahlia Zawawi, Ph.D. 16

Job Specialization
Dividing work into separate jobs that
include a subset of the tasks required to
complete the product or service
Scientific management
Frederick Winslow Taylor
Advocated job specialization
Taylor also emphasized person-job
matching, training, goal setting, work
incentives

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Evaluating Job Specialization
Advantages Disadvantages
Less time changing Job boredom
activities Discontentment pay
Lower training costs Higher costs
Job mastered quickly Lower quality
Better person-job Lower motivation
matching

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Job Characteristics Model
Core Job Critical
Characteristics Psychological Outcomes
States

Skill variety Work

motivation
Task identity Meaningfulness
Task significance Growth
satisfaction

Autonomy Responsibility General

satisfaction

Feedback Knowledge Work

from job of results effectiveness

Individual
differences

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Improving Task Significance
Through the Voice of the
Customer
Rolls Royce Engine Services in
California introduced Voice of the
Customer, an initiative in which
customers talk to production staff
about how the quality of these
engines are important to them. It
gives employees with relatively
repetitive jobs the sense that they're
not just working on a part but rather
are key in keeping people
safe,explains a Rolls Royce executive.

2 October 2014 Dahlia Zawawi, Ph.D. 20

Job Rotation
Moving from one job to
another
Benefits
Job A
Minimizes repetitive strain
injury Job B

Multiskills the workforce

Potentially reduces job
boredom
Job D

Job C

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Job Enlargement
Adding tasks to an existing job
Example: video journalist

Traditional news team

Video journalist
Employee 1
Operates camera Operates camera
Operates sound
Employee 2 Reports story
Operates sound
Employee 3
Reports story
Job Enrichment
Given more responsibility for scheduling,
coordinating, and planning ones own work
1. Clustering tasks into natural groups
Stitching highly interdependent tasks into one job
e.g., video journalist, assembling entire product

2. Establishing client relationships

Directly responsible for specific clients
Communicate directly with those clients

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Dimensions of Empowerment
Self- Employees feel they have
determination freedom and discretion

Employees believe their work is

Meaning
important

Employees have feelings of self-

Competence
efficacy

Employees feel their actions

Impact
influence success

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Supporting Empowerment
Individual factors
Possess required competencies, able to
perform the work
Job design factors
Autonomy, task identity, task significance,
job feedback
Organizational factors
Resources, learning orientation, trust

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Self-Leadership
The process of influencing oneself to
establish the self-direction and self-
motivation needed to perform a task

Includes concepts/practices from:

Goal setting
Social learning theory
Sports psychology

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Elements of Self-Leadership
Constructive Designing Self-
Personal Self-
Thought Natural Reinforce-
Goal Setting Monitoring
Patterns Rewards ment

Personal goal setting

Employees set their own goals
Apply effective goal setting practices

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Elements of Self-Leadership
Constructive Designing Self-
Personal Self-
Thought Natural Reinforce-
Goal Setting Patterns Rewards Monitoring ment

Positive self-talk
Talking to ourselves about thoughts/actions
Potentially increases self-efficacy
Mental imagery
Mentally practicing a task
Visualizing successful task completion
Elements of Self-Leadership
Constructive Designing Self-
Personal Self-
Thought Natural Reinforce-
Goal Setting Patterns Rewards Monitoring ment

Finding ways to make the job itself more

motivating
eg. altering the way the task is accomplished
Elements of Self-Leadership
Constructive Designing Self-
Personal Self-
Thought Natural Reinforce-
Goal Setting Patterns Rewards Monitoring ment

Keeping track of your progress toward the self-

set goal
Looking for naturally-occurring feedback
Designing artificial feedback
Elements of Self-Leadership
Constructive Designing Self-
Personal Self-
Thought Natural Reinforce-
Goal Setting Patterns Rewards Monitoring ment

Taking a reinforcer only after completing a

self-set goal
eg. Watching a movie after writing two more
sections of a report
eg. Starting a fun task after completing a task that
you dont like
Self-Leadership Contingencies

Individual factors
Higher levels of conscientiousness and
extroversion
Positive self-evaluation (self-esteem, self-
efficacy, internal locus)

Organizational factors
Job autonomy
Participative leadership
Measurement-oriented culture

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