Organizational Behavior (MGT 5702): Readings Review Sheet, Fall 2007

On the Folly of Rewarding A, While Hoping for B
1. What is the basic idea here?
That we are put in situations in which the reward is greater or we are being rewarded for the behavior that the payer of the reward does not want. We want the reward and produce the behavior that will get us the reward, but is not what the payer was hoping for. The author seems to say that people “hope” that we will rise up and do what is right no matter what the reward. - Incentives are difficult to manage and can have unintended consequences.

2. Be able to give (or recognize) an example of this phenomenon.
Politics:
As American citizens we want politicians/candidates to disclose operating goals and give details like where the money will come from. However, we punish those candidates by not voting for them and vote for the candidate who does not tell us what we want to hear.
War:
Compares WWII to Vietnam. In both cases the soldiers want to return home (reward); however, in WWII the soldiers new that they had to win to get this reward. Therefore, with that knowledge the military hoped that it would make the soldiers obey orders on when to attack. The same is true for Vietnam, but in this instance the soldiers new they could go home after their tour. So, the military did not get what they had hoped for…obedience…because they were rewarding what would not get them what they hoped for.
Medicine:
Court pays more if a physician deems an individual incapacitated and les if they do not. Therefore, we see that in more cases the person is deemed incapacitated which is not what they were hoping for, but were rewarding for.
Universities:
Teachers are rewarded for research not teaching. Emphasis on grades vs. knowledge.
Sports:
Rewards are distributed according to individual performance – players think of themselves first and the team second.
Business
A performance award system gives merit increases even to those who commit gross acts of negligence.

Employee Theft as a Reaction to Underpayment Inequity: The Hidden Cost of Pay Cuts

1. What theories and concepts form the basis of the hypotheses proposed in this study?
Equity Theory:
The article talks about workers experiencing underpayment, inequity, and that they attempt to redress that by raising their inputs (theft). People are motivated to have equity. They look at outcomes they are getting in a situation and compare that to the inputs. Inputs/outcomes=input/outcomes=equity. People tend to want to solve inequity. i.e. he is getting more we I deserve more thus theft might occur.
Procedural Justice:
People care about x and y and the procedures used to carry out x and y. Therefore, if you explain to people they will view the pay cut as more fair.

2. What were the key findings of this research?
If there is inequity people will: • Pay reduction leads to frustration/resentment motivating people to theft or quit • Attempt to balance out inequity
However, if procedural justice is used in an honest, sincere manner then there more than likely will be less theft and less turnover.

Practical Retention Policy for the Practical Manager
1. Why are turnover and retention especially important issues for organizations today?
Today, we live in a world with increased labor costs that affect the company competitive well being and organizational finances. Thus, the following are reasons as to why retention and turnover are important issues. • Training costs-> they are investing in us->thus more money • Increase turnover due to our generation being flighty->thus increase in money to bring someone just as qualified in. Everyday it costs more • Working women->33% in 1986 left to have kids. This is rising because more wmn in workplace. Have to find a way to keep them around. • Competitions between businesses are more competitive. More