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• Pay as a Motivator
- Expectancy: Instrumentality, the association between performance and outcomes, must be high for motivation to be high.
- Need Theory: pay is used to satisfy many needs.
- Equity Theory: pay is given in relation to inputs.
• Merit Pay Plan
- A compensation plan that bases pay on individual, group and/or
organization performance.
- Individual plan: when individual performance (sales) can accurately
measured.
- Group plan: when group that works closely together is measured and rewarded as a group.
- Organization plan: when group or individual outcomes not easily
measured.