Download - Incentives complexity
Incentives Complexity
Incentives may have a sweet topping; but
underneath they may be deleterious
How?
Let us start on our discovery journey
There is complexity in motivation and this complexity warrants greater attention
The motivation to give incentives will work up to a certain range (optimal range). Say, somebody welcomes monetary incentives. This is correct up to a limit, when the same person might seek different incentives such as more work responsibility.
There is a switch over of preferences
A second point is the realization that there exists a feedback
mechanism that might lead to non-linear results.
Giving more money to an employee will motivate him. This motivation
increases his productivity and desirability to do more work, which in turn enhances his eligibility for more
financial incentives
The Feedback Loop
These positive feedback interactions lead to surprising results that are non-
linear
Imagine if same employees keep getting the majority of financial
incentives
Big financial incentives create disparities
These disparities weaken any
system such as organizations
Eggshells would be
very hard to break if
they were thicker
Thick cement blocks are
easy to break the more
disparity there is in their
voids
Do not allow for disparity in
your organization
Else, the organization will become
like….
Fragile Glass-Like
Organizations
Shutters
1 more point
People future rewards are
based on today's rewards
This may lead to widening
the gaps within
organizations
Beware of the inflation of incentives
Do not limit your incentives to
monetary ones; mix them with
other incentives such as traveling