Please, write a discussion post about the Topic/Statement below (200 words) and respond to the two classmate discussion posts (150 words each).
Topic/Statement: W. Edwards Deming, often refe
ed to as the leading quality guru in the United States, and psychologist Alfie Kohn support the idea that incentive pay is not a motivator for individuals to do a good job. Yet economists argue that incentive compensation does work and as economist George Baker notes in his 1993 article in the Harvard Business Review titled "Rethinking Rewards," "The problem is not that incentives can't work but that they work too well." What does Baker mean? Discuss the importance of a well-developed compensation plan in attracting and retaining good employees and how to keep those plans from "working too well."
(1 or 2 Citations needed for this discussion post)
Rethinking Reward article link: https:
Classmate discussion posts: (Please, the responses need to be a discussion, not an evaluation. You can agree with them and add new information regarding the topic in discussion. No citation required for classmates responses)
George Baker means that incentives can work so well that employees will engage in questionable behaviors just to receive the rewards. There are three important points about incentive conflict that must be kept in mind: incentive problems exist because of conflicts between employers and employees, firms can identify the most efficient actions and pay employees only if those actions are taken and there is a trade-off between the benefits of the action for the firm and the personal costs borne by employees (Brickley, Smith, & Zimmerman, XXXXXXXXXXEmployees are paid not only in monetary compensation but also in fringe benefits, additional incentives that hold value to employees. Firms that listen to employees’ desires about fringe benefits can use this to attract and retain qualified employees. The salary-fringe benefit mix is often used to attract a specific-type of employee for the talent pool. There are two arguments supported by the critics of incentive pay: first that money does not motivate and secondly, that it is difficult to design a compensation plan that is effective. The first argument is inco
ect as most people respond to monetary incentives. The important goal of compensation plans is to design a plan that where the benefits exceed the costs (Brickley, Smith, & Zimmerman, 2019).
Brickley, J., Smith, C., & Zimmerman, J XXXXXXXXXXManagerial Economics & Organizational Architecture (6th Edition). New York City: McGraw-Hill Education.
As you can tell by Deming, Kohn, and Baker, the topic of incentive pay being a motivator or not is opinion. As Baker XXXXXXXXXXnotes,
“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.” (para 1)
In my work, I see both employees motivated by incentive, which could return great success or could mean not doing such a great job to get the numbers higher, and also, some not motivated because they simply don’t care or are ‘burnt out’.
When Baker stated that incentives “work too well”, there may be “unwanted side effects” or “plans that provide incentives for the wrong behavior will produce the wrong results” XXXXXXXXXXBrickley, Smith, and Zimmerman XXXXXXXXXXobserved this as well stating, “incentive problems exist within firms because owners and employees have fundamentally different objectives” (p.470). Clear objectives should be set at the start of the incentive period ensuring that the incentives are not rewarding bad behavior based on unclear expectations.
A well- developed compensation plan is important in attracting and retaining good employees. “Research by Glassdoor found that 35 percent of employees are so unsatisfied with their salary that they’d be willing to go through a new job hunt to improve their compensation packages” (Elder, 2017, para 5). However, studies have also shown that employees are more concerned with the work environment, colleagues, and quality (Brickley, 2019, p.489) and building a strong company culture improves organizations success in today’s market (Edler, 2017).
If you are looking for a temporary push to reach a goal, an incentive could be beneficial. The employees should be able to expect what the reward will be instead of basing it on a vague description from their supervisor so that they can put forth the effort knowing what will come from it. Kohn XXXXXXXXXXasks if rewards work and responds by stating that “rewards succeed at securing one thing only: temporary compliance. They do not create an enduring commitment to any value or action. They merely, and temporarily, change what we do” (para 3).
Bennett Stewart, Eileen Appelbaum, Andrew M. Le
y, Teresa Amabile, Je
McAdams, L. Dennis Kozlowski, George P. Baker III, Donita S. Wolters. Michael Beer XXXXXXXXXXRethinking Rewards. Retrieved from Harvard Business Review. https:
Brickley, J., Smith, C., & Zimmerman, J XXXXXXXXXXManagerial economics and
organizational architecture (6th ed.). New York: McGraw Hill/Irwin.
Elder, E. (March 27, XXXXXXXXXXIt Takes More than Salary to Attract and Retain Talent.
Retrieved from Randstand Risesmart https: