Motivational Applications

Designing of Reward System

• Intrinsic Rewards- This reward emerges from the

work performance itself when the work
performer experiences sense of accomplishment
on doing a good work. e.g. sense of
accomplishment, appreciation etc.
• Extrinsic Rewards- It is a tangible reward that is
provided to employees after the work
performance such as pay increase, promotion
etc.
 Designing of Incentive System
• Incentive system means many kinds of inducements offered to
people to perform work, or to work up to or beyond acceptable
standards.
• Financial Incentives
Productivity –linked Incentives- Shop- floor level where outputs can be
measured quantitatively
Types of Productivity linked incentives
• Earnings varying in proportion to output
• Earnings varying Proportionately less than output
• Earnings varying Proportionately more than output
• Earnings varying Differently at different levels of output
Performance Based Pay
Profit Sharing
Co-partnership
 Stock Option
Under this scheme, employees are given shares of a company in such
a way that they enjoy long-term benefits due to appreciation in
share profits.
There are two types of schemes:
3. ESOS: Employee Stock Option Scheme
An employee is given an option to purchase shares at a future date
at a pre-determined price which is either expressed in terms of
percentage of the prevailing market price at the time of exercising
the options or fixed in absolute value. Generally, the stock option
scheme covers managerial personnel who meet certain specific
conditions. Like position held, length of service and performance.
• ESPS: Employee Stock Purchase Scheme: In this the employees
are offered shares at discounted price to market rate, the discount
varies to a great extent. Under this scheme the shares have a lock
in period and the shares are saleable after the lock-in period.
 Retirement Benefits
• Provident Fund Scheme: Under the provisions of Employees
Provident Fund and Miscellaneous Provisions Act, the employer has
to contribute 8.33 percent of wages/ salaries of employees every
month. The employees make equal contribution though the are
permitted to more if they so desire.
• Pension Scheme: A pension represents the payment of a fixed
amount to a retired employee or surviving dependants every month
provided the employee has fulfilled certain specific conditions of
employment.
• Gratuity: This payment is regulated by the Payment of Gratuity Act,
1972. Under this Act, gratuity is payable to all employees after the
termination of their services by way of their retirement or resignation
provided they have completed 5 years of continuous services. The
gratuity is payable at the rate of 15 days wages/salaries for each
year of completed service subject to a max limit of Rs. 3.5 lakh.
 Non-Financial Incentives
• Status
• Promotion
• Responsibility
• Making Job Pleasant and Interesting
• Recognition of Work
• Job Security
Collective Incentives
• Social Importance of work
• Team Spirit
• Informal Groups
 Job Design
Job Design: It integrates work content (tasks, functions,
relationships), the rewards ( extrinsic and intrinsic ) and
the qualifications required (skills, knowledge, abilities) for
each job in a way that meets the needs of employees
and the organization.
Motivational Job Design
• Job Simplification
• Job Rotation
• Job Enlargement
• Job Enrichment
 Quality of Work Life
Quality of work Life is concerned about the impact
of work on people as well as on organization
effectiveness and the idea of participation in
organizational problem solving and decision
making.
Flexibility in work schedule
Autonomous work groups
Job enrichment
Opportunity for Growth
Participation
Communication
 Empowerment
Empowerment is any process that
provides greater autonomy through the
sharing of relevant information and the
provision of control over factors affecting
job performance.
 Effects of QWL
• Job involvement
• Sense of competence
• Job satisfaction
• Job performance and productivity
 Job Satisfaction
Job satisfaction is the amount of pleasure or
contentment associated with a job. If you
like your job intensely, you will experience
high job satisfaction. If you dislike your job
intensely, you will experience job
dissatisfaction.
Determinants of Job satisfaction
Individual factors
• Level of Education
• Age
• Other factors
Nature of Job
• Occupation Level
• Job content
Situational Variables
• Working conditions
• Supervision
• Equitable Rewards
• Opportunity for Promotion
• Work Group