Chapter 8, Problem 17CR

Summary Introduction

To Discuss:

If you think frequent small raises versus annual, larger raises is more motivating and if so why or if not so why not.

Case Summary: Some organizations tried to keep the motivation going among their employees by increasing the frequency of raises. An employee motivation can increase if there is a hope of an increase in salary. Initially start employees at a low pa rate is one of the tactic followed by many organization. Most of the new hires earn 20% more after two years than what they would earn with annual raise in their pay structure. But these frequent raises in pay are not cheap enough or easy to administer. Also, receiving frequent review is motivating but only for those employees who have received positive reviews and not for others who struggle hard to remain engaged.

Interpretation: Receiving frequent small raises in salary is more motivating or an annual larger raise keep the employees more motivated is what need to be discussed. What factors makes frequent small raises in pay more motivating and attractive.

Adequate Information: Most of the new hires earn 20% more after two years than what they would earn with annual raise in their pay structure. Currently 5 of organizations gives raise more than annually but some big organizations like discount website retailer Zulily gives raises quarterly.