Are employers wise to employ "pay for performance" strategies in the workplace? From piece-work pay for factory workers and commissions for sales personnel to stock options for top executives, three-fourths of all U.S. corporations are said to rely on pay-for-performance.
In Rewards Produce Temporary Compliance author Alfie Kohn argues that carrots and sticks are ineffective at producing long-lasting attitudinal or behavioral changes in workers; management consultant and author Bob Nelson, while agreeing in Incentive Programs Can Work that "the best motivation is intrinsic [i.e. things other than money or other rewards]" disagrees that rewards should be scapped; instead, he says, what's important it to reward the right goals: for example, cooperation, creativity, making cost-saving suggestions, etc.
In Reward and Incentive Programs are Ineffective -- Even Harmful, consultant/trainer Peter R. Scholtes seems to agree that reward systems don't work, and advocates "removing the demotivators" as an excellent way to tap into peoples' innate motivation to do a good job. Finally, Frank C. Hudetz offers the perspective of a successful CEO in Self-Actualization and Self-Esteem are the Highest Order of Incentives; he says that "only long-term, team-building incentives" have made his company, Solar Press, Inc. successful.
Reprinted with permission from the Small Business Forum, Winter 1994/1995 issue. For more information on the Small Business Forum, please see the Wisconsin SBDC Home Page.