In this case analysis we shall be examining the unintended contradictory results that reward systems bring about and recommendations in solving the issues highlighted
Many Problems in Organizations are created because of Faulty Incentives and Flawed reward systems that are setup to accomplish one thing but actually does the opposite. “While Mangers complain about lack of motivation in their workers, they might as well consider the possibility that the reward systems they’ve installed are paying off for the opposite”. Directly linked to these Faulty Incentive and Flawed Systems are key issues with 1) Employee Motivation, 2) Reward Systems, 3) Expectation/Misaligned Perception and 4) Biasness in Decision making that are deeply rooted as a causative agent in the Flawed system
Process Perspective: A look at Equity theory and Expectancy Theory in understanding the expected outcome perceived by employee as related to behavioral attitude towards rewards systems
2)Employee Motivation which is dependent on the effectiveness of its reward system: As pointed out by MASLOW HIERACHY OF NEEDS and HERZBERG’S TWO-FACTOR theory of Motivation highlight the effect of rewards both tangible and intangible on behavior 3) Weak or Poor decision Making: As shown by biasness of the community in electing Public service official, even in the face of the right option for endorsement/election 4) Poor performance and attitudes In Most Companies is caused by its reward systems, not the workforce.
As Pointed out by Expectancy theory that People make choices about behavior based on their expectation of what is likely to happen in terms of effort leading to performance and performance leading to desired reward. On the other hand Equity Theory Points out that those Perceptions about reward systems matter. From Equity Theory, if the Ratio of someone’s outcome/input is equal to someone else’s ratio, equity exists. But if not, inequity exists and the theory suggests that People are motivated to reduce their Contribution in some way According to Equity theory, outcomes from a Job include pay, recognition, promotions, social relationships and intrinsic rewards. To get these rewards, the individual makes inputs to the job such as time, effort, experience e.t.c and compares it to someone else’s ratio of contribution. Thus the Individual behavior is affected by his or her Perception than the actual reality. In Sports, An underpaid Basketballer will be discouraged in developing teamwork skill. in order to make up for any inadequacies, Expecting that Scoring will Increase his or her earnings at the detriment of the team success. Similarly, if this player perceives that future rewards might be compromised; such player will reduce his or her commitment in response to his feeling of inequity towards the Team success. Thus it is discovered that people take into account Equity and expectation about future rewards in their choice of behavior.
Taking a look further points out that Many rewards systems discourage desired behaviors’ while rewarding the very action that causes problems. Managers obviously design reward systems to motivate people to behave in certain ways, yet reward systems do not always produce the expected results. For example: In World War II troops were committed for the duration unless killed or invalided. They had a strong motivation to hasten the end of the war. Allied troops in the Vietnam War had a tour of a year or less. Their self interest was not tied to the end of the war. While their governments wanted them to focus on winning the war, their rewards were linked to looking after themselves. Not to their opponents. They were there for the duration.
Evidence of a Reward System which encourages Contrary behavior can also be traced to the Health Industry .Looking at...