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.
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 Peter Principle is the observation that if people are good at doing their jobs they will be promoted. It follows that eventually, everyone will be doing a job that they are not good at (otherwise they would have been promoted).
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).
Last Updated on How often do you consider quitting your job and feel that you are not getting paid enough for the dedication and service you offer your organization? 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 lose motivation on failing to achieve so.
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.