Individual Processes and Characteristics, Part 1

Question 1: Many theories of motivation touch upon how a continuing sense of personal development contributes to job motivation. Discuss how skill based pay plan programs specifically reflect theories of motivation.

Answer 1: Skill based pay plan programs manifest a number of factors that a number of motivation theories point to as important motivators. When employees’ learning and personal growth are supported, according to Existence, Relatedness and Growth theory, increased motivation is the result. Ambitious employees who gain new skills will encounter new challenges, which motivation theories indicate is fundamental to ongoing motivation. Because skill based pay encourages a generalist mentality, supports collaboration, and cross trains —all skills highly prized by managers —skill based pay reinforces motivation. Finally, employees who are able to see a clear correlation between how their pay, sense of self- worth and job satisfaction increases in direct relationship to their output, feel they are being given fair treatment that is not based on seniority or a college degree. When employees perceive equity in the work place, their motivation is undoubtedly likewise enhanced.

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Question 2: Recent studies indicate that in spite of potential drawbacks, skill based pay programs are increasing in popularity and use. These studies further indicate that a higher quality of employee performance is realized, greater job satisfaction achieved, and that employees feel they are being treated more equitably. Discuss trends in skill based pay plans and how they apply to organizations.

Answer 2: Skill based pay plans were originally successful in industries which needed an increasing menu of skills and abilities but that could offer little in terms of advancement, just as factories and other industrial operations. Interestingly, the trend has expanded to include companies who are nose to nose with aggressive, determined global competitors, as well as those whose product lifecycles are short, and those who must attend to the speed at which their product reaches the market. Although skill based pay plan programs were once used primarily by factory and shop employees, the concept is currently being applied at a white collar level in many cases. Changes in the marketplace and in the world are causing organizations to redesign themselves into entities that are willing to recognize, highly prize, and pay for those skills for which they have an immediate and strong need in order to remain competitive.

Question 3: Benefits packages are important to attracting new hires and retaining current employees. The last several decades have resulted in tremendous changes to the types of employees organizations are hiring. As a result, benefits packages must tailor themselves accordingly. Three popular kinds of benefit plans include modular plans, flexible spending accounts and core plus options. Discuss these three plans.

Answer 3: Modular plans are benefits packages that variably combine units that have been designed with an eye toward a specific group of employee. For example, unmarried employees without dependents will prefer benefits packages that contain only the basics, while one created for single parents will include family health insurance, life insurance, and disability insurance. Flexible spending plans are especially attractive to individuals with specific needs. A flexible spending plan assigns a specific dollar figure which can be set aside by the employee for particular benefits, such as dental insurance, life or health insurance that she deems important. Flexible spending plans are effectively increase take home pay because taxes aren’t paid for dollars set aside for this type of account. Core-plus plans include crucial core benefits along with a list of other possibilities from which the employee can pick and choose until the ‘benefit credits’ she has been given are used up.

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