Why Incentive Plans Cant Work

Topics: Motivation, Incentive, Incentive program Pages: 35 (10705 words) Published: June 6, 2012
This document contains three articles on the value of incentives. Please read all three. Article 1
Title: Why incentive plans cannot work.
Source: Harvard Business Review, Sep/Oct93, Vol. 71 Issue 5, p54, 7p, 2 charts, 4c Author(s): Kohn, Alfie
Subject(s): INCENTIVES in industry
EMPLOYEE motivation
Abstract: Discusses reasons for the failure of incentive programs. Use of rewards to institute and maintain reforms; Securing temporary compliance; Studies showing the ineffectivity of incentive plans to boost productivity; Lack of basis for money's worth as motivator; Rewards as manipulative in nature; Employee relationships as casualties of rewards.

AN: 9312031646 ISSN: 00178012
Note: This title is held locally.
Database: Business Source Premier

Section: In Questions

When reward systems fail, don't blame the program -- look at the premise behind it. It is difficult to overstate the extent to which most managers and the people who advise them believe in the redemptive power of rewards. Certainly, the vast majority of U.S. corporations use some sort of program intended to motivate employees by tying compensation to one index of performance or another. But more striking is the rarely examined belief that people will do a better job if they have been promised some sort of incentive. This assumption and the practices associated with it are pervasive, but a growing collection of evidence supports an opposing view. According to numerous studies in laboratories, workplaces, classrooms, and other settings, rewards typically undermine the very processes they are intended to enhance. The findings suggest that the failure of any given incentive program is due less to a glitch in that program than to the inadequacy of the psychological assumptions that ground all such plans. Temporary Compliance

Behaviorist theory, derived from work with laboratory animals, is indirectly responsible for such programs as piece-work pay for factory workers, stock options for top executives, special privileges accorded to Employees of the Month, and commissions for salespeople. Indeed, the livelihood of innumerable consultants has long been based on devising fresh formulas for computing bonuses to wave in front of employees. Money, vacations, banquets, plaques--the list of variations on a single, simple behaviorist model of motivation is limitless. And today even many people who are regarded as forward thinking--those who promote teamwork, participative

management, continuous improvement, and the like--urge the use of rewards to institute and maintain these very reforms. What we use bribes to accomplish may have changed, but the reliance on bribes, on behaviorist doctrine, has not.

Moreover, the few articles that appear to criticize incentive plans are invariably limited to details of implementation. Only fine-tune the calculations and delivery of the incentive--or perhaps hire the author as a consultant--and the problem will be solved, we are told. As Herbert H. Meyer, professor emeritus in the psychology department at the College of Social and Behavioral Sciences at the University of South Florida, has written, "Anyone reading the literature on this subject published 20 years ago would find that the articles look almost identical to those published today." That assessment, which could have been written this morning, was actually offered in 1975. In nearly forty years, the thinking hasn't changed. Do rewards work? The answer depends on what we mean by "work." Research suggests that, by and large, rewards succeed at securing one thing only: temporary compliance. When it comes to producing lasting change in attitudes and behavior, however, rewards, like punishment, are strikingly ineffective. Once the rewards run out, people revert to their old behaviors. Studies show that offering incentives for losing weight, quitting smoking, using seat belts, or (in the case of children) acting generously is not only less...
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