Theories that Impact Compensation Discuss

timer Asked: Feb 7th, 2019
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Question Description

Assume that, as the compensation professional, you are to present your reasoning, based on theory, for recommending certain compensation strategies. Explain at least two theories and identify how they impact compensation and the work environment.

For this assignment you will develop a 3-5 page, APA-formatted paper. As the compensation professional you will be writing the report for the owners of a new organization. In your paper cover the following:

  • Examine two theories that impact compensation.
  • Discuss how each of the theories can motivate employees.
  • Discuss specific types of compensation providing examples on how theory can influence employee performance.


  • Write a 3-5 page paper, or about 1500 words, not including the title and reference pages, which are required.
  • You must support your analysis with at least three scholarly references and can include resources from this course.
  • The paper must be formatted correctly using APA style.

Tutor Answer

School: Rice University



Theories that Impact Compensation



Theories that impact compensation
Compensation is one of the important determinants of performance in the workplace.
Since most of the employees work so that they can earn some benefits or compensation for
their services, Pouliakas (2010) insists that organizations need to compensate their employees
reasonably and constantly monitor how their performance varies with respect to the
compensation that they gain. There are a number of theories that can be used to understand
the motivation of employees and the right compensation approaches to adopt. The following
sections discuss two of these theories and explain their impact on the motivation of the
employees. In addition, a brief analysis of the types of compensation will also be provided.
Theories that impact compensation
Expectancy theory
The first theory that impacts compensation is the theory of expectancy. Expectancy
theory is an important theory that impacts compensation as it is directly related to the
motivation of the employees. In this case, the theory is founded on the concept that employees
are motivated to select a particular behavior over another based on their expectation of the
results that will come from their behavior (Lunenburg, 2011). The desirability of the outcome
to the subject determines the motivation of the subject towards the given behavior. In this
regard, employees will tend to adopt a particular behavior that will generate positive results or
optimize their benefits. On the other hand, employees will tend to avoid behaviors that could
compromise their rewards or the benefits that are tied to that particular behavior.
Expectancy theory is ...

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Good stuff. Would use again.

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