Strategic Compensation
This is the P4P strategy best suited for a small consulting firm whose primary success measure is client satisfaction across the entire team.
What is Team-based pay for performance?
An employee believes that if they work 60 hours this week (high effort), their sales will definitely increase by 20% (high performance). This belief represents which part of Vroom's formula?
What is Expectancy?
A specific counterproductive work behavior (CWB) that results in the organization losing both human capital and institutional knowledge.
What is turnover?
This legislative trend, adopted by multiple US states, requires employers to include the pay range for a position directly in the job posting.
What is salary transparency?
A manager chooses a Market Minus compensation philosophy, which risks attracting only employees with low commitment and low performance. This group is known by this term in the Commitment/Performance matrix.
What are Apathetics?
A large, stable utility company decides to implement a P4P plan primarily through stock options given to all employees. The risk they are running is that the connection between a single employee's effort and the reward will feel this.
What is weak or unclear or low instrumentality?
A high-performing employee is given a $50 bonus for hitting a major goal, but she is unimpressed, as she doesn't value such a small amount. The reward lacks this theoretical component.
What is Valence?
A manufacturing technician, frustrated with their monotonous assembly line job, begins volunteering to train new hires and also proposes an inventory tracking system to their supervisor. This is an example of what concept?
What is Job Crafting?
This US regulatory body, led by Chair Lina Khan, issued a new rule in April 2024 that effectively bans the future use and enforcement of non-compete agreements across almost all industries.
What is the Federal Trade Commission (FTC)?
When RTO mandates eliminate the ability for employees to step back from surveillance and schedule deep focus work, the company is undermining this specific "Freedom We Want at Work."
What is the freedom to fade?
A company adopts a compensation philosophy where they intentionally pay 10% below market rate, believing their excellent corporate culture is sufficient to attract talent. This is their strategy.
What is a market minus compensation philosophy?
A manager tells his team that the top performer will receive a $5,000 bonus. The connection between hitting high performance and receiving the valued reward is represented by this term.
What is Instrumentality?
A retention strategy where the company allows employees to work their 40-hour week in four 10-hour days, giving them a three-day weekend.
What is a Compressed Work Week?
Under the FTC's ban, non-compete agreements remain enforceable only for this specific, high-level category of employee who is already subject to an existing agreement.What are senior ex
What are senior executives?
To avoid P4P-induced stress, managers, according to the Pay-for-Performance Research article, must focus on this specific part of Expectancy Theory by giving employees the necessary resources, training, and support.
What is Expectancy (or supporting Expectancy)?
A firm pursuing a differentiation strategy (known for high quality and innovation) would typically adopt this compensation philosophy to attract the best talent.
What is a market plus compensation philosophy?
If a high-performing employee quits because they feel their rewards are unfair compared to a co-worker doing less work, their reaction is best explained by this related motivational theory.
What is Equity Theory?
According to the commitment/performance model, this group of employees has high organizational commitment but consistently low task performance. Managers must decide whether to save them or move them out.
What are Citizens?
This key economic factor, which the FTC's non-compete ban is designed to increase, refers to a worker's ability to easily change jobs, which often leads to higher wages and better opportunities.
What is labor mobility (or worker mobility)?
This proactive retention tool, often framed as a "career conversation," helps combat poaching by identifying and addressing employee needs before they look for external offers, as advocated in the What to Do If Your Employees Keep Getting Poached article.
What are stay interviews (or career conversations)?
This status is achieved when an organization designs its compensation system to directly support a specific competitive strategy, such as using individual bonuses to support a cost leadership strategy.
What is strategic compensation?
A manager vaguely announces, "The best employees will be rewarded." The manager has failed to provide a clear path between performance and reward, specifically undermining this component of the motivation formula.
What is Instrumentality?
When a "Lone Wolf" quits because the company continually demands extra work without providing the promised specialized training, this unstated, relational agreement has been broken.
What is a psychological contract breach?
The RTO debate reflects a company's strategic decision to prioritize command-and-control over this highly valued, non-monetary benefit that drives retention.
What is work-life balance (or flexible work)?
The Designing Work that People Love article and The Value of Belonging article both highlight the need to address this fundamental human need, which 40% of people feel is lacking at work.
What is belonging (or social belonging)?