Accounting 202 Exam 2

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Based on initiatives to improve the quality of working life and the strong influence of Japanese management practices

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Human Resource Model of Motivation (HRMM)

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Introduces a high lefel of employee responsibility for and participation in decision s in the work environment

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Human Resource Model of Motivation (HRMM)

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Serves as the basis for the presentation of the four behavioral considerations in MACS design

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Human Resource Model of Motivation (HRMM)

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Organiations operate under a system of beliefs about the values, purpose, and direction of their organization

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Central Assumptions of the HRMM

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Should incorporate the principles of an organization's code of ethical conduct

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A well-designed MACS

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Pressures affecting a MACS:

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-managers are often subject to intense pressures from their job

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Five categories that capture the broad array of ethical considerations:

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-Legal rules
-Societal norms
-Professional memberships
-Organizational/group norms
-Personal norms

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It provides general guidelines for understanding and dealing with ethical problems that arise

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Ethical Hierarchy

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A critical variable that can reduce eithical conflicts

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The way that the chief executive and other senior managers behave and conduct business

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Conflict with stated values:

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-Make sure that the facts are correct
-Determine whether this conflict is institutional or reflects the decision s and actions of only a small minority of employees

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When faced with a true conflict, exports recommend:

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That the employee work with respected leaders in the organization to change the discrepancy between practiced and stated ethics

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If point out the discrepancy to a superior and refuse to act unethically

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this may lead to dismissa, the need to resign from the organization, or the experience of suffering hidden organization sanctions

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If point out the discrepancy to a superior and act unethically

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the rationale for this choice is that the employee believes, incorrectly, this affords protection from legal sanctions

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Other ways to deal with an ethical conflict:

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-Take the discrepancy to a mediator in the organization, if one exists
-Go outside the organization to publically resolve the issue
-Go outside the orgnaization to anonymously resolve the issue
-Resign and go public to resolve the issue
-Resign and remain silent
-Do nothing, hoping that the problem vanishes

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Three dimensions of motivation:

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direction, intensity, persistence

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The tasks on which an employee focusses attention

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Direction

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The level of effort the employee expends

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Intensity

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The duration of time that an employee will stay with a task or job

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Persistence

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Careful attention to motivationis a key step for the organization and its employees to align their respective goals

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Achieving goal congruence

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The alignment of goals occurs as employees:

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-Perform their jobs well and are helping to achieve organizational objectives
-Are attaining individual goals at the same time

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Systems that managers do not have to monitor on a regular basis; hope is that if these systems are well designed then the manager has much more time to attnd to other concerns

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Disgnostic control systems

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Force a dialogue among all organizational participants about the data that is coming out of the system and what to do about it

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Interactive control systems

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At the core of both systems are two common methods of control:

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Task and results control

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the process of finding ways to control behavior so that a job is completed in a pre-specified manner

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Task Control

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Two categories of task control:

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Preventitive control; Monitoring

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Preventive control

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Much if not all of the discretion is taken out of performing a task

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Monitoring

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Inspecting the work or behavior of employees while they are performing a task

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Methods focus on measuring employee performance against stated objectives; must have clearly defined objectives, communicated them to appropriate organization members, and designed performance measures consistent with the objectives

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Results control

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Altering actions specifically in an attempt to manipulate a performance indicator through job-related acts

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Gaming the performance indicator

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knowingly altering records

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Data falsification

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Accelerating or delaying the flow of data without altering the organization's activities

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Smoothing (a form of earnings management)

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Empowering employees in MACS design requires two essential elements:

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-allowing employees to participate in decision making
-ensuring that employees understand the information they are using and generating

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second critical element of empowering employees

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ensure that they understand the information they use and on which they are evaluated

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Reward systems to further motivate employees

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intrinsic rewards, extrinsic rewards, organizations use many systems of financial rewards

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Different theories of motivation:

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expectancy theory, agency theory, goal setting theory

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These come from within and individual and reflect satisfaction from doing the job and growth opportunities the job provides

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Intrinsic Rewards

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Any reward that one person provides another to recognize a job well done: based on assessed performance

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Extrinsic Rewards

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Base rewards on acheieving or exceeding some measured performance

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Pay-for-performance systems

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The number of acceptable quality untis produced, The organization's results, the organization's share price performance are:

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Measures of absolute performance

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Paying a manager for accomplishing his/her goals under budget,or paying a production group a bonus for beating a benchmark performance level

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the ability to exceed a performance target level

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Sharing in a pool defined as the organization's reported profits less a stipulated return to shareholders

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The amount of a bonus pool

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Must focus primarily on outcomes that the employee controls or influences

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Incentive compensation system

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Ex's cash bonuses, profit sharing, gainsharing, stock options, performance shares stock, etc.

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Incentive compensation plans

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Pays cash based on some measured performance

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Cash bonus plan

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A cash bonus calculated as a percentage of an organization unit's reported profit

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Profit sharing

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All profit-sharing plans define:

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-What portion of the organization's reported profits is available for sharing
-The sharing formula
-The employees who are eligible to participate int he plan
-The formula for each employee's share

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A system for distributing cash bonuses from a pool when the total amount available is a function of performance relative to some target

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Gainsharing

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Gainsharing is a group incentive that usually:

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-Provides for the sharing of financial gains in organizational performance
-Applies to a group of employees within an organization unit, such as a department or a store

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The right to purchase a unit of the organization's stock at a specified price, called the option price

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Stock option plans

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Designed to motivate employees to act in the long-term interests of the organization by acting so as to increase its market (stock) value

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Stock Related Plans