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Assignment:
Please answer each part of this essay question in 1-2 short paragraphs.
Ava is implemeting a new merit-pay system at her company of 60 employees. She hopes it will increase employee extrinsic motivation. Ava's plan gives the 10 highest-performing employees a 3% bonus, the 40 middle-performing employees a 2% bonus, and the 10 lowest-performing employees a 1% bonus (Assume that most employees currently make about $50,000). She comes to you for advice.
A. Using either Expectancy Theory or Equity Theory, fully explain to Ava whether or not you expect this merit-pay system to increase extrinsic motivation for her workforce. You do not need to fully describe your chosen motivation model, but need to correctly use specific concepts from it in your answer.
B. Whether or not you think Ava's merit-pay system is effective, provide her with two specific suggestions on how it can be improved, specifically justifying each suggestion by using specific concepts from any of the extrinsic motivation models we discussed in class (expenctancy, equity, reinforcement, goal-setting).
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