Companies should use individual-level performance-based pay when jobs are highly interdependent.

Some of the important strategies for improving reward effectiveness are:

Link rewards to performance: Inconsistencies and bias can be minimized through gainsharing, ESOPs, and other plans that use objective performance measures. Where subjective measures of performance are necessary, companies should rely on multiple sources of information. Companies also need to apply rewards soon after the performance occurs, and in a large-enough dose (such as a bonus rather than a pay increase) so that employees experience positive emotions when they receive the reward.

Ensure that rewards are relevant: Companies need to align rewards with performance within the employees control. The more employees see a "line of sight" between their daily actions and the reward, the more they are motivated to improve performance. Reward systems also need to correct for situational factors. Salespeople in one region may have higher sales because the economy is stronger there than elsewhere, so sales bonuses need to be adjusted for such economic factors.

Use team rewards for interdependent jobs: Team rewards are better than individual rewards when employees work in highly interdependent jobs, because it is difficult to measure individual performance in these situations. Team rewards also encourage cooperation, which is more important when work is highly interdependent. They also tend to support employee preferences for team-based work.

Ensure that rewards are valued: It seems obvious that rewards work best when they are valued. Yet companies sometimes make false assumptions about what employees want, with unfortunate consequences. The solution, of course, is to ask employees what they value.

Watch out for unintended consequences: Performance-based reward systems sometimes have an unexpected—and undesirable—effect on employee behaviors. The solution here is to carefully think through the consequences of rewards and, where possible, test incentives in a pilot project before applying them across the organization.

How can companies improve the pay performance linkage?

Which of the following are benefits of high levels of job specialization quizlet?

Which of the following is an advantage of job specialization?

Which of these job design actions is mainly a form of job enlargement?