Chapter 10 - Public HRM

Compensation, Merit Pay and Motivation Presented by: Ken Lee (Qian Li)

Organizations Motivate Join & Remain Perform assigned roles Act innovatively & spontaneously Types Of Behavior

Desired Behaviors & Rewards Desired Behaviors Organizations encourage Rewards Membership Reliable Role Innovative spontaneous activity Pay & Fringe Benefits Responsibility & Autonomy Social Affiliations Organization provide

Pay Membership Performance Cash Retirement plans life & health insurance indirect compensation Instrumental System Rewards Geared to Performance

[object Object],[object Object],Theory of Pay for Performance

Theory of Pay for Performance Sales in Private Sector PMRS Contingency Pay Schemes Salary Welfare Bonus

Design of Pay-for-performance Strategic Choices Structural Issues Process Issues

Structured Issues Structured Issues Measures of Performance Comprehensiveness of Criteria /Objectivity of Measures Salary vs Bonus Permanent Adjustment to Base Pay/One-time Bonus Level of Aggregation Individual/Program/Installation/Agency/Bureau Size of Payouts 3% is a good rule of thumb Administrative Convenience Frequency of Payout Hierarchy/ Subunits Number of Different Plans

Process Issues Participation in system design Employee involvement is likely to provide better Information about which plan designs are most attractive Obtaining legislative agreement with system objectives instrumental value, ongoing cost, distribution of rewards, risks Participation in system administration ,[object Object],[object Object]

Common Problems ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Common Problems Invalid performance appraisals ,[object Object],[object Object],[object Object],[object Object]

Common Problems Dysfunctional competition ,[object Object],[object Object],[object Object],[object Object]

Common Problems ,[object Object],[object Object],[object Object],Lack of adequate financial rewards

What Works In The Public Sector ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Reasons for Continuing Experimentation Failures involve designs predicated almost exclusively on an individual level of aggregation. Notion of "each according to his or her efforts“ is ingrained in the American political culture. Failures were predictable because the structure or administration of the system violated one or more principles of system design.

Guidelines ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Thank You! Presented by: Ken Lee (Qian Li)

Chapter 10 - Public HRM

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