HRM textbook

400 PART 4 COMPENSATION
Challenging work assignments
Freedom to choose own work activity
Having fun built into work
More of preferred task
Role as boss s stand-in when he
or she is away
Role in presentations to top
management
Job rotation
Encouragement of learning
and continuous improvement
Being provided with ample
encouragement
Being allowed to set own goals
Compliments
Expression of appreciation in front
of others
Note of thanks
Employee-of-the-month award
Special commendation
Bigger desk
Bigger office or cubicle
FIGURE 12-1 Social Recognition and Related Positive Reinforcement Managers Can Use
Source: Bob Nelson, 1001 Ways to Reward Employees (New York: Workman Pub, 1994), p. 19; Sunny
C. L. Fong and Margaret A. Shaffer, The Dimensionality and Determinants of Pay Satisfaction:
A Cross-Cultural Investigation of a Group Incentive Plan, International Journal of Human Resource
Management 14, no. 4 (June 2003), p. 559.
Online and IT-Supported Awards
Incentive programs can be expensive and complicated to administer. 37 For example,
with more than 1,000 sales representatives, First Tennessee Bank was having problems
managing its sales incentive programs. 38 Tracking the performance of dozens
or hundreds of measures and then computing individual employees incentives is
time-consuming. Bank employees had to enter by hand sales information for each
of the 1,000 sales reps onto Excel spreadsheets. The process, said one officer,
had begun to spiral out of control. As one solution, vendors provide enterprise
incentive management (EIM) systems. These automate the planning, analysis, and
management of incentive compensation plans. 39
Administering recognition programs is similarly challenging. If a company has an
Employee Anniversary Recognition Program, for instance, someone (probably in
human resources) needs to compile a prizes catalog, distribute it, and keep track of
who gets what. Many firms including Levi Strauss & Co. and Walmart now use
online awards firms to expedite the process. Management consultant Hewitt Associates
uses www.bravanta.com to help its managers more easily recognize exceptional
employee service with special awards. Additional Internet incentive/recognition sites
include www.premierechoiceaward.com/secure/home.asp, www.giveanything.com,
www.incentivecity.com, and www.kudoz.com.
Job Design
Although not usually considered an incentive, job design can have a significant impact
on employee motivation and retention. A study by Harvard Business School researchers
concluded that job design is a primary driver of employee engagement. A study by
Sibson Consulting concluded that job responsibility and feedback from a job were the
fifth and seventh most important drivers of employee engagement. A study by Towers
Watson concluded that challenging work ranked as the seventh most important driver
for attracting employees. 40 Job design is thus a useful part of an employer s total
rewards program.
3 Discuss the pros and cons
of commissions versus
straight pay incentives
for salespeople.
INCENTIVES FOR SALESPEOPLE
Sales compensation plans typically rely heavily on sales commissions, and should
aim to achieve the company s strategic (and therefore sales) goals. As one survey
said, the performance metrics given to the sales team must drive behaviors that will
help the company s go-to-market strategy to be successful. 41 Unfortunately, the