Using Rewards to Motivate Employees

  1. 5 Demonstrate how the different types of variable-pay programs can increase employee motivation.

As we saw in Chapter 3, pay is not the only factor driving job satisfaction. However, it does motivate people, and companies often underestimate its importance. One study found that while 45 percent of employers thought pay was a key ­factor in losing top talent, 71 percent of top performers called it a top reason.64

Given that pay is so important, will the organization lead, match, or lag the market in pay? How will individual contributions be recognized? In this section, we consider (1) what to pay employees (decided by establishing a pay structure), and (2) how to pay individual employees (decided through variable-pay ...

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