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    Explanation of compensation plans that affect motivation

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    There is much debate over the role of compensation plans in affecting employee motivation. The vice president of operations wants to know your studied opinion on the matter and is glad to share hers.

    Review the following article:

    Why Performance Related Pay (PRP) Doesn't Work http://www.arrod.co.uk/archive/concept_PRP_doesnt_work.php

    The VP of operations asks you the following questions:

    * Does pay motivate employees? Why or why not?
    * How could you measure the motivating effects of your organization's compensation programs?

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    Solution Preview

    Does pay motivate employees? Why or why not?

    I think for the most part, everyone is motivated by money to some degree. However, some would argue that money doesn't change behavior in the workplace, and it takes a great manager to keep employees motivated. Nevertheless, management can play a significant role in keeping employees motivated to do their jobs well. Just saying a kind word like "thank you" can go a long way. But, money can ...

    Solution Summary

    This solution provides an explanation about pay and whether or not it motivates employees. It also discusses how motivating effects of an organization compensation program can be measured.