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8 Pros and Cons of Incentives - BrandonGaille.com

What Are the Pros of Incentives?

What Are the Pros of Incentives?
  1. 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.
  2. 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.
  3. Having a tangible reward tied to their performance is a simple method of motivation and combats boredom.
  4. 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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8 Pros and Cons of Incentives - BrandonGaille.com

8 Pros and Cons of Incentives - BrandonGaille.com

https://brandongaille.com/8-pros-and-cons-of-incentives/

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Key Ideas

What Are the Pros of Incentives?

  1. 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.
  2. 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.
  3. Having a tangible reward tied to their performance is a simple method of motivation and combats boredom.
  4. 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?

  1. 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.
  2. 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.
  3. It eliminates productivity for everyone except top performers who are more benefited by incentives. 
  4. 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
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. 
The Peter Principle
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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Asynchronous communication

There are mainly two ways to communicate within a company: synchronous and asynchronous communication. While the second type has always been widely practiced, as face-to-face meetings or any other ...

Real-time communication drawbacks

While real-time communication inside of a team might lead to solving faster some issues, it also has various disadvantages. 

For instance, having your colleagues come to ask you questions to which you feel pressured to answer on the spot leads to you being continuously interrupted, which results in being less productive and feeling stressed or even getting a burnout, as you try to do everything in proper time.

The asynchronous workplace

When the employees are provided with control as to when they are willing to communicate with their co-workers, there are many advantages that emerge. 

For instance, having the freedom to decide exactly how your working day should look like leads to more satisfied employees as well as to better communication within the team. Further benefits vary from feeling less stressed due to better planning to greater transparency and more efficient work.

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Setting employee expectations
A recent study reveals that almost half of all U.S. employees are unsure of what's expected of them.

Setting clear employee expectations can benefit your business. Management must co...

Employer/Employee expectations

Employee expectations to maintain:

  • Displaying a positive and respectful attitude
  • Working with honesty and integrity
  • Performing their work to a reasonable standard 

Employees expectations;

  • Proper training, support and leadership from management and access to resources
  • Timely and accurate payment of wages
  • Safe working environments
  • Explanation of responsibilities, company policies and procedures
  • Regular feedback from supervisors or managers.
Team expectations

Team expectations refer to the behaviors that occur while working together on tasks. 

  • Respect and courtesy to everyone.
  • Be accountable for your work.
  • Be reasonably flexible about task assignments.
  • Be willing to lend a helping hand.
  • Ask for help when needed.
  • Work safely together.
  • Be open to constructive feedback.
  • Be self-motivated and reliable.
  • Share ideas for improvement.
  • Be cheerful, positive and encouraging to other team members.

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The Default Choice
The Default Choice

While prompted to make a decision with a given set of options, a person has the freedom to refuse to actively make a choice.

The decision-making process of the person is affected by the

How Economic Incentives Affect Our Choices

If a person is told about the economic incentives of their selection, they are more likely to make an active choice.

If the person is told about the pros and cons of their decision, they have a logical reason to make the desired choice, as it can minimize any potential loss.

Rewards And Penalties

Organizations need to understand when to provide a reward to the person making the choice to promote active choice-making, or to initiate a penalty to make them provide a concrete answer.

Early times

Before the Industrial revolution, everyone worked out of their home and sold their goods from there. With the Industrial Revolution came the need for automation and factories, and employ...

From factories to cubicles to WiFi

Just after WW2, there was a rise in corporate headquarters and larger office spaces and cubicles. During this time, the 8-hour workday was established.

Then came the advancements in computers and technology that lead to remote workers of today. The internet and public WiFi allowed employees to do everything they would in their cubicle, but outside the office. They can also work all hours of the day.

Remote work is common

4.3 million people currently work from home in the United States at least half of the time, and this figure has grown by 150% in the last 13 years.  

Remote workers tend to have higher engagement rates and higher productivity levels. Once they switch to remote work, they rarely want to become office bound again.

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Conflict with bad coworkers

Having a bad coworker can really hamper your mood over the long haul, as well as your job performance. 

How you deal with that conflict could very well be the difference between h...

Accept and Acknowledge Personality Differences

Small tics will be magnified and personality differences lead to varying work styles, which can easily turn into conflict.

Conflict can even arise from something as simple as you desiring a quiet lunch period, while your coworkers like to socialize. These types of things are simply differences in how you work or socialize, and don’t necessarily make your coworkers bad.

Know the Pros and Cons of the Work Culture

Some work cultures are notoriously demanding and competitive, which can obviously lead to a lot of conflict.

In a sales environment where folks are competing for commissions and bonuses, it’s understandable that not everyone would be over-the-top friendly with each other. You should consider whether you might be misinterpreting behavior or overreacting to it.

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Bigger Isn’t Better

The Travel and Tourism industry always thrived on big. Big cruise ships, crowded national parks, and large scale corporatization.

The trillion dollar bailouts and stimulus packages should b...

The World Becomes Non-Essential

As we fall back to the ‘essential’ living conditions, locked down at our homes, the excesses of our globalized world, the giant amusement parks, malls, hotels, airlines, resorts, and the hoards of travellers are visible.

We have to look towards a more sustainable future of travel, and not screw up this time.

Lower accountability
Lower accountability

Procrastinating is even easier when you have no one looking over your shoulder. Lower accountability can make procrastination more likely at home.

And without the whole context of an ...

High tolerance to frustration

People with high frustration tolerances are the ones that generally succeed at remote work. And you can take steps to raise your frustration tolerance and become more conscientious by working on your impulsivity.

A non-conscientious person will find another activity (a distraction most likely) the moment something challenging or uncomfortable comes up. They have to be more conscious to stay in the moment: count to five or take five deep breaths, for example.

A lack of boundaries

When work and personal activities are occurring in the same space, there are no cues for you to behave the way you do at work while you are outside your physical office.

Those who work well from home create boundaries in a work-life world without them. Then, once these parameters are established, people who commit fewer ‘boundary violations’ are better off.

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