Unintended Effects of Employee Incentives

Unintended Effects of Employee Incentives
Author: Jeff Brazell
Publisher:
Total Pages: 140
Release: 2001
Genre: Employee competitive behavior
ISBN:

"This paper discusses the notion that divisional or departmental incentives, whether formal or informal, can and often do conflict with the overall strategic objectives of the company. Moreover, the resulting conflict can result in very discouraging outcomes in terms of the overall effectiveness that a company has in achieving its objectives. This paper starts with a review of the inherent nature of formal incentive programs that often conflict with corporate goals and that organizations often fail to consider how information is disseminated within their organizations, sometimes causing issues in regard to the general lack of information between individuals or teams within the firm. Several business cases are reviewed wherein corporate incentive policies have resulted in negative behaviors of employees as a result of misaligned performance goals. By reviewing these cases one can understand the impact that an employee's opportunistic behavior can undermine the goals of a company by reacting to financial incentives. Finally, the paper investigates the strategic shortcomings of formal institutionalized incentive-based programs like MBO and Performance Management Systems that have been found ineffective when not backed up by engaged leadership from top management. The paper concludes by sugesting that companies must become more aware of the effect that communication and culture play in the way employees react to performance and incentive issues."--Author's Abstract.

Risky Rewards

Risky Rewards
Author: Andrew Hopkins
Publisher: Ashgate Publishing, Ltd.
Total Pages: 193
Release: 2015-02-28
Genre: Political Science
ISBN: 147244986X

Financial incentives have long been used to try to influence professional values and practices. Recent events including the global financial crisis and the BP Texas City refinery disaster have been linked to such incentives, with commentators calling for a critical look at these systems given the catastrophic outcomes. Risky Rewards engages with this debate, particularly in the context of the present and potential role of incentives to manage major accident risk in hazardous industries. It examines the extent to which people respond to financial incentives, the potential for perverse consequences, and approaches that most appropriately focus attention on major hazard risk. The book is based in part on an empirical study of bonus arrangements in eleven companies operating in hazardous industries, including oil, gas, chemical and mining.

Design Elements and Requirements of Incentive Systems in Organizations

Design Elements and Requirements of Incentive Systems in Organizations
Author: Manuel Jacoby
Publisher: GRIN Verlag
Total Pages: 21
Release: 2021-02-09
Genre: Business & Economics
ISBN: 3346343243

Academic Paper from the year 2018 in the subject Leadership and Human Resources - Employee Motivation, grade: 1,3, International University of Applied Sciences, language: English, abstract: If you look for any specific definitions, you will find a huge variation considering the term incentive systems. Weber paraphrases incentive systems as having the aim to encourage employees positively through their performance, with benefits for the organization to reach its stated goals and objectives. In turn, Bartscher identifies incentive systems as the sum of all created working conditions, directly or indirectly to impact the motivation and thus work performance of employees, evoking a certain desired behavior. Coherently, incentive systems aim to control behavior of employees. But they do not only support a certain behavior, such systems additionally are designed to avoid unwanted behavior. Think of any internal regulations which intent to avoid behavior patterns by providing rules and/or punishments. Furthermore, as an example, a low performance might result in a curtailed income and loss of personal reputation.

Incentive Magnitude, Job Satisfaction, Perceived Stress, and Performance: Interrelationships in an Organizational Simulation

Incentive Magnitude, Job Satisfaction, Perceived Stress, and Performance: Interrelationships in an Organizational Simulation
Author: Barrie L. Cooper
Publisher:
Total Pages: 82
Release: 1987
Genre:
ISBN:

The level of productivity growth in the United States required to maintain our standard of living, provide for the national defense, and reduce the federal deficit can be realized only through increased efforts by organizations to improve their efficiency. At the individual level, attempts to improve productivity have generally included efforts to improve employee performance. This desired increase in productivity can, however, yield unintended outcomes. A s result, paralleling this increased productivity emphasis has been an increased interest in the mix of positive and negative effects of work and the work environment on the individual employee. Two areas of particular interest to researchers in recent years have been job satisfaction and job stress. The purpose of this study was to determine the relationships among monetary incentives, performance, job satisfaction, and perceived stress. The potential of monetary incentives to increase performance, together with their use in a broad spectrum of industries, has made incentives an important factor in the study of job satisfaction and stress. The current interest in productivity improvement makes the study of incentives doubly important.

The Incentive Plan for Efficiency in Government Operations

The Incentive Plan for Efficiency in Government Operations
Author: Barrington K. Brown
Publisher: Xlibris Corporation
Total Pages: 42
Release: 2017-05-08
Genre: Business & Economics
ISBN: 1543418961

The purpose of this paper is to present the government-employee incentive program as a method by which government deficits can be reduced or eliminated, and government surpluses can be generated. Section 2 deals with the nature of the incentive plan, section 3 deals with the incentive chain in relationship to the plan, section 4 makes some remarks concerning the incentive program, and section 5 deals with statistics gathering under the incentive program. Section 6 makes some concluding remarks. The analysis begins by holding real appropriations constant. Government employees are given, in the form of additional income, a stated percent of the total amount saved out of initial appropriations. Each employee, in each incentive unit, receives an amount equal to the proportion that his/her salary represents of total salaries paid for that incentive unit.

Mixed Signals

Mixed Signals
Author: Uri Gneezy
Publisher: Yale University Press
Total Pages: 318
Release: 2023-01-01
Genre: Business & Economics
ISBN: 0300255535

An informative and entertaining account of how actions send signals that shape behaviors and how to design better incentives for better results in our life, our work, and our world "Getting [an] incentives balance right can be complicated. But Gneezy hopes his book provides insights that help people feel prepared to take on the concept and design better incentives."--Financial Times "If you think you understand how incentives work, think again. A pioneering behavioral economist reveals how we can create reward systems that minimize unintended consequences and maximize happiness, health, wealth, and success."--Adam Grant, Granted (blog) Incentives send powerful signals that aim to influence behavior. But often there is a conflict between what we say and what we do in response to these incentives. The result: mixed signals. Consider the CEO who urges teamwork but designs incentives for individual success, who invites innovation but punishes failure, who emphasizes quality but pays for quantity. Employing real-world scenarios just like this to illustrate this everyday phenomenon, behavioral economist Uri Gneezy explains why incentives often fail and demonstrates how the right incentives can change behavior by aligning with signals for better results. Drawing on behavioral economics, game theory, psychology, and fieldwork, Gneezy outlines how to be incentive smart, designing rewards that are simple and effective. He highlights how the right combination of economic and psychological incentives can encourage people to drive more fuel-efficient cars, be more innovative at work, and even get to the gym. "Incentives send a signal," Gneezy writes, "and your objective is to make sure this signal is aligned with your goals."