Compensation Motivates Behavior

How Compensation Motivates Behavior?

Abstract

The design and implementation of performance measurement and compensation system strength can affect the motivation of employees. Based on the economic and psychological theory, this study develops a conceptual model that is used to empirically test this effect. Experts have found that employee perceptions of compensation system influence the motivation of the agents. Results of different studies have shown a significant positive relationship between perceived characteristics of the system of compensation and extrinsic motivation. Intrinsic motivation is not affected by the design of compensation system monetary, but is affected by opportunities for promotion. The compensation system also significantly affects other indicators of motivation, i.e., job satisfaction and turnover intention. Further research could extend these findings by investigating the relationship between intrinsic and extrinsic motivation on the one hand and individuals and companies on the other.

How Compensation Motivates Behavior?

Introduction

Knowing that money is a strong factor in motivating the behavior of employees, the first step toward offering employees compensation packages that speak to each employee's needs. Money is a motivating factor at times, but when money is no longer tied to progress toward career goals, it loses its value as a motivational force. However, when money is used to reward teamwork when production goals are met, or when sales initiatives have been reached, then employees can tangibly see the correlation between hard work and the rewards it can bring (Milkovich, 2008).

Discussion and Analysis

The remuneration of all types can be a motivating factor when a highly qualified applicant faces a choice between his companies and is offering a better package. Although wages are lower, benefit packages can attract strong candidates into the fold because they know their efforts will be rewarded (Milkovich, 2008).

Competitive salaries are only the beginning. incentive compensation based on goal setting, achievement of sales, including production levels and cost reduction can be highly motivating factors when employees know they will reap the monetary benefits that are directly linked to their efforts. Merit pay is another way to reward excellence among employees.

Achievement awards, plaques, trophies, and even T-shirts can be used to motivate employees who thrive when their efforts and skills are recognized. The Employee of the Month "program cannot motivate all employees, but it will be for some, while other forms of compensation is a motivating factor for others.

Reminding employees that their contributions are valued team is the bottom line when using the compensation to motivate employees. Managers who know what are really important for an employee, and recognize employees in a way that is meaningful to them, they will have happier and healthier workers who love their work and they like to do a good job (Rosenthal, 2004).

A company moving towards a socio-oriented culture, high performance may want to order the survey on key categories of business. For example, a survey may consist of the Culture, Business, Finance and categories. The questions in each category should focus on the kinds of attitudes, behaviors and knowledge needed for success in that category (Milkovich, ...