1. What theories about motivation underlie the switch from salary to commission pay?
In this case the manager assumes that money will motivate the sales performance. This is a form of content theories of motivation. Content theories of motivation focus on the needs that motivate employees to do better. With increased sales commissions, money can satisfy psychological needs, social needs, and self-esteem. The expectancy and equity process theories of motivation can also be applied in this case. The Expectancy theory says that motivation occurs when the employee is attracted to the reward being offered and believes he/she can put forth the effort necessary to achieve that level of performance. Commission pay is an example of an extrinsic or outside reward that is meant to motivate employees. The Equity theory relates to the sales people being compensated for their level of effort, compared to other sales people and how their pay reflects that effort. At Kimbel’s the sales people in the women’s designer shoes and handbag department are motivated by the fact that their department is always very busy and will lead to greater commissions for them. This is not the case in the lingerie department where business is slow, leading to less opportunity for greater performance and pay.
2. What needs are met under the commission system? Are they the same needs in the shoes and handbag department as they are in lingerie? Explain.
A commission payment system can lead to higher level needs being met. Larger commissions and greater sales effort by the employees can lead to increased recognition and some may be able to realize their full potential. Self-esteem needs and self-actualization can also be achieved. The needs are the same in both departments; however a straight commission system in the lingerie department does not offer the same level of reward that it does in women’s shoes and designer handbag department. The commission on lingerie is...
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