Chapter 8 Vocab

Question 1

Job Design

Answer 1

The way the elements in a job are organized.

Question 2

Job Characteristics Model (JCM)

Answer 2

A model that proposes that any job can be described in terms of five core job dimensions: skill variety, task identity, task significance, autonomy, and feedback.

Question 3

Skill Variety

Answer 3

The degree to which a job requires a variety of different activities so the worker can use specialized skills and talents.

Question 4

Task Identity

Answer 4

The degree to which a job requires a completion of a whole and identifiable piece of work.

Question 5

Task Significance

Answer 5

The degree to which a job has a substantial impact on the lives or work of other people.

Question 6

Autonomy

Answer 6

The degree to which a job provides substantial freedom and discretion to the individual in scheduling the work and in determining the procedures to be used in carrying it out.

Question 7

Feedback

Answer 7

The degree to which carrying out the work activities required by a job results in the individual obtaining direct and clear information about the effectiveness of her or her performance.

Question 8

Motivating Potential Score (MPS)

Answer 8

A predictive index that suggests the motivating potential in a job.

Question 9

Job Rotation

Answer 9

The periodic shifting of an employee from one task to another.

Question 10

Job Enrichment

Answer 10

The vertical expansion of jobs, which increases the degree to which the worker controls the planning, execution, and evaluation of the work.

Question 11

Flextime

Answer 11

Flexible work hours.

Question 12

Job Sharing

Answer 12

An arrangement that allows two or more individuals to split a traditional 40-hour-a-week job.

Question 13

Telecommuting

Answer 13

Working from home at least two days a week on a computer that is linked to the employer’s office.

Question 14

Employee Involvement

Answer 14

A participative process that uses the input of employees and is intended to increase employee commitment to an organization’s success.

Question 15

Participative Management

Answer 15

A process in which subordinates share a significant degree of decision making power with their immediate superiors.

Question 16

Representative Participation

Answer 16

A system in which workers participate in organizational decision making through a small group of representative employees.

Question 17

Variable-pay Program

Answer 17

A pay plan that bases a portion of an employee’s pay on some individual and/or organizational measure of performance.

Question 18

Piece-rate Pay Plan

Answer 18

A pay plan in which workers are paid a fixed sum for each unit of production completed.

Question 19

Merit-based Pay Plan

Answer 19

A pay plan based on performance appraisal ratings.

Question 20

Bonus

Answer 20

A pay plan that rewards employees for recent performance rather than historical performance.

Question 21

Skill-based Pay

Answer 21

A pay plan that sets pay levels on the basis of how many skills employees have or how many jobs they can do.

Question 22

Profit-sharing Plan

Answer 22

An organization-wide program that distributes compensation based on some established formula designed around a company’s profitability.

Question 23

Gainsharing

Answer 23

A formula-based group incentive plan.

Question 24

Employee Stock Ownership Plan (ESOP)

Answer 24

A company-established benefits plan in which employees acquire stock, often at below-market prices, as part of their benefits.

Question 25

Flexible Benefits

Answer 25

A benefits plan that allows each employee to put together a benefits package individually tailored to his or her own needs and situation.

Question 26

The first three dimensions—skill variety, task identity, and task significance—combine to create meaningful work the incumbent will view as important, valuable, and worthwhile.

From a motivational standpoint, the JCM proposes that individuals obtain internal rewards when they learn (knowledge of results) that they personally (experienced responsibility) have performed well on a task they care about (experienced meaningfulness). the more these three psychological states are present, the greater will be employees’ motivation, performance, and satisfaction, and the lower their absenteeism and likelihood of leaving.

Answer 26

jobs with high autonomy give incumbents a feeling of personal responsibility for the results; if a job provides feedback, employees will know how effectively they are performing.

Individuals with a high growth need are more likely to experience the critical psychological states when their jobs are enriched—and respond to them more positively—than are their counterparts with low growth need.

Question 27

The first three dimensions—skill variety, task identity, and task significance—combine to create meaningful work the incumbent will view as important, valuable, and worthwhile. From a motivational standpoint, the JCM proposes that individuals obtain internal rewards when they learn (knowledge of results) that they personally (experienced responsibility) have performed well on a task they care about (experienced meaningfulness). Individuals with a high growth need are more likely to experience the critical psychological states when their jobs are enriched—and respond to them more positively—than are their counterparts with low growth need.

Answer 27

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Question 28

Strengths of job rotation are that it reduces boredom, increases motivation, and helps employees better understand their work contributions. Indirect benefits include employees with wider ranges of skills that give management more flexibility in scheduling, adapting to changes, and filling vacancies. Some weaknesses of job rotation include disruptions, a need for extra time for supervisors addressing questions and training time, and reduced efficiencies.

Answer 28

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Question 29

Exhibit 8–2 shows guidelines for job enrichment. Job enrichment expands jobs by increasing the degree to which the worker controls the planning, execution, and evaluation of the work.

The first guideline is combining tasks that puts fractionalized tasks back together to form a new and larger module of work. Second is forming natural work units that make an employee’s tasks create an identifiable and meaningful whole. Third, establishing client relationships increases the direct relationships between workers and their clients. (Clients can be internal as well as outside the organization.) Fourth, expanding jobs vertically gives employees responsibilities and control formerly reserved for management. Finally, opening feedback channels lets employees know how well they are doing and whether their performance is improving, deteriorating, or remaining constant.

Answer 29

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Question 30

Alternative work arrangements are also used to boost motivation. They include flextime, defined as flexible work hours like those shown in Exhibit 8-3. This allows employees some discretion over when they arrive at and leave work. Benefits include reduced absenteeism, increased productivity, reduced overtime expense, reduced hostility toward management, and increased autonomy and responsibility for employees. A major drawback is that it’s not applicable to all jobs or all workers.

Answer 30

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Question 31

There are reasons for and against telecommuting. The advantages include a larger labor pool of workers, higher productivity, less turnover, improved morale, and reduced office-space costs.

Answer 31

Disadvantages of telecommuting for the employer include less direct supervision of employees, difficulty coordinating teamwork, and difficulty evaluating non-quantitative performance. Disadvantages for the employee include that he or she may not be as noticed for his or her efforts.

Question 32

The job characteristics model shows most employees are more motivated and satisfied when their intrinsic work tasks are engaging.
Having the most interesting workplace characteristics in the world may not always lead to satisfaction if you feel isolated from your co-workers, and having good social relationships can make even the most boring and onerous tasks more fulfilling. Research demonstrates that social aspects and work context are as important as other job design features.
Some social characteristics that improve job performance include interdependence, social support, and interactions with other people outside work.
The work context is also likely to affect employee satisfaction.
To assess why an employee is not performing to her best level, look at the work environment to see whether it’s supportive.

Answer 32

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Question 33

Employee involvement draws on several of the theories on motivation that we discussed in Chapter 7. Theory Y is consistent with participative management.
Theory X aligns with autocratic style. The two-factor theory aligns with employee involvement programs in providing intrinsic motivation. And extensive employee involvement programs clearly have the potential to increase employee intrinsic motivation in work tasks.

Answer 33

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Question 34

Now, let’s talk about using rewards to motivate people, and specifically, what to pay employees. As we saw in Chapter 3, pay is not a primary factor driving job satisfaction. However, it does motivate people, and companies often underestimate its importance in keeping top talent. A 2006 study found that while 45% of employers thought pay was a key factor in losing top talent, 71% of top performers called it a top reason.

So, what should an organization do? How should the pay structure be established? The answer is not easy – it’s a complex process that entails balancing internal equity and external equity. Some organizations prefer to pay leaders by paying above market. Keep in mind that paying more may net better-qualified and more highly motivated employees who may stay with the firm longer.

Answer 34

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Question 35

Rewarding individual employees through variable-pay programs is becoming more common in the workplace. A number of organizations are moving away from paying solely on credentials or length of service. Piece-rate plans, merit-based pay, bonuses, profit sharing, gain sharing, and employee stock ownership plans are all forms of a variable-pay program, which base a portion of an employee’s pay on some individual and/or organizational measure of performance. Individual earnings therefore fluctuate up and down.

Answer 35

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Question 36

The second variable pay method is the merit-based pay plan. These plans are based on performance appraisal ratings. Their main advantage is that they allow employers to differentiate pay based on performance, and so create perceptions of relationships between performance and rewards. Most large organizations have merit pay plans, particularly for salaried employees. Limitations to merit-based plans include that they are based on annual performance appraisal, that the merit pool fluctuates based on economic conditions, and that unions typically resist merit-based pay plans.

Answer 36

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Question 37

. The incentive effects of performance bonuses should be higher than those of merit pay because rather than paying for performance years ago, which was rolled into base pay, bonuses reward recent performance. When times are bad, firms can cut bonuses to reduce compensation costs. The downside of bonuses is that employees’ pay is more vulnerable to cuts

Answer 37

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Question 38

Skill-based pay is also called competency-based or knowledge-based pay and is an alternative to job-based pay that bases pay levels on how many skills employees have or how many jobs they can do. For employers, the lure of skill-based pay plans is that they increase the flexibility of the workforce, because filling staffing needs is easier when employee skills are interchangeable. Skill-based pay also facilitates communication across the organization because people gain a better understanding of each other’s jobs. The disadvantages to skill-based pay are few. However, people can “top out”—that is, they can learn all the skills the program calls for them to learn. Finally, skill-based plans don’t address level of performance—they deal only with whether someone can perform the skill.

Answer 38

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Question 39

Gainsharing is a formula-based group incentive plan. Its popularity seems narrowly focused among large manufacturing companies, although some healthcare organizations have experimented with it as a cost-saving mechanism. Gainsharing differs from profit sharing in tying rewards to productivity gains rather than profits, so employees can receive incentive awards even when the organization isn’t profitable. Because the benefits accrue to groups of workers, high performers pressure weaker ones to work harder, improving performance for the group as a whole.

Answer 39

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Question 40

Another variable-pay option is the employee stock ownership plan, or ESOP. An ESOP is a company-established benefit plan in which employees acquire stock, often at below-market prices, as part of their benefits. Most of the 10,000 or so ESOPs in the United States are in small, privately held companies. Research on ESOPs indicates that they increase employee satisfaction and innovation. ESOPs have the potential to increase employee job satisfaction and work motivation, but employees need to psychologically experience ownership.

ESOP plans for top management can reduce unethical behavior. CEOs are more likely to manipulate firm earnings reports to make themselves look good in the short run when they don’t have an ownership share, even though this manipulation will eventually lead to lower stock prices. However, when CEOs own a large amount of stock, they report earnings accurately because they don’t want the negative consequences of declining stock prices.

Answer 40

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Question 41

Do variable-pay programs increase motivation and productivity? The answer is a qualified yes. Studies generally support the idea that organizations with profit-sharing plans have higher levels of profitability than those without them. One study found that whereas piece-rate pay-for performance plans stimulated higher levels of productivity, this positive affect was not observed for risk-averse employees.

You’d probably think individual pay systems such as merit pay or pay-for-performance work better in individualistic cultures such as the United States or that group-based rewards such as gain sharing or profit sharing work better in collectivistic cultures. Unfortunately, there isn’t much research on the issue. One recent study did suggest that employee beliefs about the fairness of a group incentive plan were more predictive of pay satisfaction in the United States than in Hong Kong. One interpretation is that U.S. employees are more critical in appraising a group pay plan, and therefore it’s more critical that the plan be communicated clearly and administered fairly.

Answer 41

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Question 42

Flexible benefits individualize rewards by allowing each employee to choose the compensation package that best satisfies his or her current needs and situation. These plans replace the “one-benefit-plan-fits-all” programs designed for a male with a wife and two children at home that dominated organizations for more than 50 years. Fewer than 10% of employees now fit that image. About 25% are single, and one-third are part of two-income families with no children.

Flexible benefits can accommodate differences in employee needs based on age, marital status, spouses’ benefit status, and number and age of dependents.

Answer 42

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Question 43

There are three basic types of programs: 
Modular plans: pre-designed with each module put together to meet the needs of a specific group of employees. 
Core-plus plans: a core of essential benefits and a menu-like selection of other benefit options. 
Flexible spending plans: employees set aside pretax dollars up to the amount offered in the plan to pay for particular benefits, such as healthcare and dental premiums. 

Today, almost all major corporations in the United States offer flexible benefits. They’re becoming the norm in other countries too. A recent survey of 211 Canadian organizations found that 60% offer flexible benefits, up from 41% in 2005. A similar survey of firms in the United Kingdom found that nearly all major organizations were offering flexible benefits programs, with options ranging from private supplemental medical insurance to holiday trading, discounted bus travel, and childcare vouchers.

Answer 43

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Question 44

Organizations are increasingly recognizing that important work rewards can be both intrinsic and extrinsic. Rewards are intrinsic in the form of employee recognition programs and extrinsic in the form of compensation systems.

Employee recognition programs range from a spontaneous and private thank-you to widely publicized formal programs in which specific types of behavior are encouraged and the procedures for attaining recognition are clearly identified. Some research suggests financial incentives may be more motivating in the short term, but in the long run, it’s nonfinancial incentives. A few years ago, research found that recognition, recognition, and more recognition was key to employee motivation.

Answer 44

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