Post on 18-Jan-2018
description
Why Incentive Systems FailWhy Incentive Systems FailEric Withee
Kameel Husain
IntroductionIntroduction
• How are the incentives used today in corporations?
• What are incentives trying to accomplish?
• Are incentives really working?
Origins of the Reward SystemOrigins of the Reward System
• Behaviorist Theory – Positive/Negative Reinforcement
• In 40 Years, Thinking Hasn’t Changed
• Monkey Experiment?
Financial Incentives and PerformanceFinancial Incentives and Performance
• Is There a Positive Correlation Between Incentives and Performance?
• Jenkins Study – 90 U.S. Corporations• 57% Found Positive Effect on
Performance• BUT, All Results Were Quantitative
in Nature – Faster, More, etc.• No Analysis of the Quality
Why Rewards FailWhy Rewards Fail
• There Has Been Tremendous Research on Tweaking the Incentive Plan
• Still, There Are Fundamental Flaws In Behaviorism Itself
• 6 Reasons For Failure.
11 . .Pay Is Not A MotivatorPay Is Not A Motivator
• Employees Value Pay Less Than Most Expect.• Paying More Does Not Mean Better Work• Pay Cuts Often Demotivate, But Pay
Increases Rarely Increase Satisfaction or Job Quality
2. Rewards Punish2. Rewards Punish• Incentives are
Manipulative• Punishment and
Rewards are Two Sides of the Same Coin.
• Creates a Workplace In Which People Feel Controlled
3. Rewards Rupture Relationships3. Rewards Rupture Relationships
• Forces People to Compete For Rewards
• Competition Creates Dissent
• Damages Relationships Between Managers and Employees
4. Rewards Ignore Reason4. Rewards Ignore Reason• Incentives Are
Easy Fix for Problems – Band Aid
• Rewards Ignore What Employees Need to Perform – Useful Feedback, Social Support, Self Determination, Environment
5. Rewards Discourage Risk-Taking5. Rewards Discourage Risk-Taking
• Limits Creativity• Fear of Reward Loss
(Punishment) Deters Employees From Trying New Things
• Keeps Them Thinking Inside The Box
• “Do That and You’ll Get This”
• Do Rewards Motivate?
6. Rewards Undermine Interest6. Rewards Undermine Interest• Intrinsic Vs. Extrinsic
Motivation• The Need For
Managers to Motivate Through Incentives Gives the Impression That the Job is Undesirable
• Reward Drives Behavior
• Pay-For-Performance Lowers Enthusiasm
ConclusionConclusion
• Cannot Add Intrinsic and Extrinsic Motivators
• Turns Focus Away From Job• Social Capital Is Better Approach• Bribes in the Workplace Simply
Can’t Work
Questions?Questions?• Alfie Kohn, “Why Incentive Plans
Cannot Work.” Harvard Business Review.