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8 Pros and Cons of Incentives - BrandonGaille.com
What Are the Pros of Incentives?
- Having a good salary and benefits package is great, but having extra incentives for a job well done makes workers feel appreciated. That decreases turnover and increases profits.
- Offering incentives for a good job creates a sense of caring or kinship in the worker and, over time, it increases the worker’s loyalty and their investment into the welfare of the business.
- Having a tangible reward tied to their performance is a simple method of motivation and combats boredom.
- They are easy to include in any industry or working environment. The rules which govern how the incentives can be earned must be clear and precise.
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What Are the Pros of Incentives?
- Having a good salary and benefits package is great, but having extra incentives for a job well done makes workers feel appreciated. That decreases turnover and increases profits.
- Offering incentives for a good job creates a sense of caring or kinship in the worker and, over time, it increases the worker’s loyalty and their investment into the welfare of the business.
- Having a tangible reward tied to their performance is a simple method of motivation and combats boredom.
- They are easy to include in any industry or working environment. The rules which govern how the incentives can be earned must be clear and precise.
What Are the Cons of Incentives?
- Create conflict: those who don’t receive incentives may be jealous of those who do regardless of merit. Those who receive incentives might also be upset if they worked harder than others to get the same reward.
- The focus of work becomes competitive instead of being focused on quality and people will only work as much as it takes to earn the incentive.
- It eliminates productivity for everyone except top performers who are more benefited by incentives.
- Incentives can become quite costly as they need to continue to rise on a scale of cost in order to remain effective.
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Tips To Establish A Benign Incentives Program
- Ongoing feedback from both customers and employees can help provide an indication of how well these programs are working.
- Deal with issues directly and transparently to ...
The Cons Of Incentive Programs
- May Encourage Deception: Employees may look for ways to make their performance appear to be good when it isn’t.
- Misaligned Incentives: poorly conceived ones may incentivize risky and irresponsible behavior that undermines the mission of the company.
- Can Lead to Conflict: iI competitive workplaces with limited rewards, employees may engage in bad behavior to get ahead or become convinced that pursuing incentives is a zero-sum proposition and become resentful.
The Pros Of Incentive Programs
- Increased Productivity: Rewarding the delivery of tangible results reinforces that good work will be rewarded.
- Strengthens Succession Pipeline: Employees often try to improve their skills in the pursuit of incentives, ultimately increasing their own efficiency.
- Encourages Retention: A good incentive program increases employee job satisfaction and overall loyalty to the organization.
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The Peter Principle
It refers to an observation wherein people who perform well in their job gets promoted until eventually, they will reach a stage where they are incompetent for that job.
The Evidence for the Peter Principle
A study looked at promotions and performance of some 40,000 sales workers across 131 firms.
It showed that the best salespeople as measured by sales revenue are more likely to be promoted (top figure) but their value added as managers actually declines in their sales revenues (bottom figure).
The "Purpose" of Promoting Workers
- To assign the suitable person to the managerial role.
- To motivate workers excel in their current roles.
However, If firms promoted workers on the basis of managerial potential rather than current performance, employees may have fewer incentives to work as hard.
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Happiness
Happiness and satisfaction are subjective concepts – while for some of us monetary benefits can be equated with job satisfaction, some might strive for recognition of their hard-work and los...
Workplace Happiness defined
In a fundamental sense, workplace happiness comes when:
- We enjoy doing the tasks assigned to us
- We feel right about the people we are working with
- We are happy with the financial benefits we get from the job
- We have the scope of improving our existing skills
- We feel respected and acknowledged at work
Importance Of Happiness At Work
Happy employees are compulsory for a growing business.
A study on organizational success revealed that employees who feel happy in the workplace are 65% more energetic than employees who don’t. They are two times more productive and are more likely to sustain their jobs over a long period of time.
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