Merit based pay plans pay for individual performance. However, unlike piece rate, which pay based on objective output, merit based pay plans are based on performance appraisal ratings. Main advantage of merit pay plans is that they allow employers to differentiate pay based on performance so that those people thought to be high performers are given bigger raises. The plans can be motivating because, if they are designed correctly individuals perceive a strong relationship between their performance and the rewards they received. The evidence supports the importance of this linkage. Most large organizations have merit pay plans, especially for salaried employees. IBM’s merit pay plan, for example, provides increase to employee’s base salary based on their annual performance evaluation.

Piece rate wages have been popular for more than a century as a means of compensating production workers in piece rate pay plans, workers are paid a fixed sum for each unit of production completed. When an employee gets no base salary and is paid only for what he are she produces, this is a pure piece rate plan. People who work in ball parts selling peanuts and soda are frequently paid this way. if they sell only forty bags of peanuts, they are take only $40. The harder they work and the more peanuts they sell, the more they earn. The limitation of these plans is that they are not feasible for many jobs.

If employees suffer from over reutilization of their work, one alternative is to use job rotation. We define this practice as the periodic shifting of an employee from one task to another. When an activity is no longer challenging, the employee is rotated to another job, usually at the same level, that has similar skill requirements. Singapore airlines, one of the best related airlines in the world, uses job rotation extensively. For example, a ticket agent may take on the duties of a baggage handler. Job rotation is one of the reasons Singapore airlines is rated as highly desirable place to work. Many manufacturing forms have adopted job rotation as a means of increasing flexibility and avoiding layoffs. For intense, managers apex precision technologies, a custom machine shop in Indiana, continually train workers on all of the companies equipments so they can be moved around in response to the requirements of income orders

Job enrichment is refers to the vertical expansion of jobs. It increases the degree to which the workers control the planning, execution, and evaluation of the work. An enriched job organizers tasks so as to allow the worker to do a complete activity, increases the employees freedom and independent, increases responsibility, and provides feedback so individuals will be able to assess and correct their own performance. Combining tasks takes existing fractionalize tasks and fix them back together to form a new and larger module of work. Forming natural work units means that the tasks an employee does create an identifiable and meaningful whole. Establishing client relationships increases the direct relationship between workers and their clients

The referent that an employee selects adds to the complexity of equity theory. There are four referent comparisons that an employee can use: self-inside is an employee’s experiences in a different position inside the employee’s current organization. Self-outside is an employee’s experiences in a situation or position outside the employee’s current organization. Other-inside is another individual or group of individuals inside the employee’s organization. Other-outside is another individual or group of individuals outside the employee’s organization. Employee’s might compare themselves to friends, neighbors, coworkers or colleagues in other organizations or compare their present job with past jobs they themselves have had. Which referent an employee chooses will be influenced by the information the employee holds about referents as well as by the attractiveness of the referent

A counterpoint to goal-setting theory is reinforcement theory. The former is a cognitive approach, proposing that an individual’s purpose direct his action. Reinforcement theory takes a behaviorist approach, arguing that reinforcement conditions behavior. The two theories are clearly at odds philosophically. Reinforcement theorists see behavior as being environmentally caused. You need not be concerned, they would argue, with internal cognitive events; what controls behavior is reinforces any consequences that, when immediately following responses, increase the probability that the behavior will be repeated. Reinforcement theory ignores the inner state of the individual and concentrates solely on what happens to a person when he or she takes some action. Because it does not concern itself with what initiates behavior, it is not, strictly speaking, a theory of motivation

Task significance is the degree to which a job has a substantial impact on the lives or work of other people. An example of a job scoring high on significance would be the job of a nurse handling the diverse needs of patients in a hospital intensive care unit. A job scoring low on this dimension would be the job of a janitor sweeping floors in a hospital. Autonomy is the degree, to which a job provides substantial freedom, independence, and discretion to the individual in scheduling the work and in determining the procedures to be used in carrying it out. An example of a job scoring high on autonomy is the job of a sales person who schedule his or her own work each day and decides on the most effective sales approach for each customer without supervision