The Effect of Task Complexity on the Relation Between Team-based Incentives and Performance

“Incentives are the cornerstone of modern life”(Levitt and Dubner 12). Levitt and Dubner once mentioned in their book “Freakonomics”. According to Oxford dictionary, incentives are something tends to incite to action or greater effort, as a reward offered for increased productivity (“incentives”). In business field, incentives are something given by bosses to encourage their employees to endeavour in bringing benefits to their business. For a simple example, the employee who hits the monthly or year sales target will get cash or prizes as incentives. Apparently, these incentives are something that motivates employees maintains their great performance and also to motivate other employee, whoever wants to get the incentives, work harder.

Serious issues with incentives also include employees telling their superiors that everything is under control when it isn?t, just to save their bonus. Kohn then states that ?There are very few things that threaten an organisation as much as a hoard of incentive driven individuals trying to curry favour with the incentive dispenser? (1993, p.56).

employees demographics and the link between incentives/productivity can help understand which type of reward is more efficient in improving employee performance.

All of this information would need to be used to determine what actions need to be taken. For example, if people are happy with their pay, they may not need to be offered more monetary incentives. Perhaps, they are simply looking for a clearly defined career path or praise for their efforts. It would be nonsensical to offer them more money, if recognition would solve some of the problems.

Kelly, K. (2010). The Effects of Incentives on Information Exchange and Decision Quality in Groups. Behavioral Research In Accounting, 22(1), 43-65. doi:10.2308/bria.2010.22.1.43

Therefore, even though additional effort may be put into a project it is concluded to have

This source cites may studies stating the monetary incentive have a negative impact on the stated goal. Kohn states that the best that can be expected is a temporary compliance to the desired outcome. Once the incentives were taken away the behavior returned to normal.

Having buy-in from key stakeholders is crucial for the success of an incentive pay system. For example, if top management does not support such a program, lower-level managers will place little importance on effectively administering the program. Hence, a lack of top management support often leads to a lack of accountability. (Gordon, Kaswin)

O’Neil (1998) suggests six minimal criteria for the design of a performance based pay system. The first of these criteria is that the reward system should be self-funding, that is, the performance increases should as a minimum offset the cost of the rewards provided. The second criterion is that the distribution of the rewards must be consistent, fair and justifiable. In addition reward plans must be transparent and clearly communicated. The third criterion

Hierarchical structure is important in the workplace because employees are motivated to perform and improve their status within the company. People often respond to incentives, whether it be a promotion or a bonus. There are motivations behind one’s performance. In both shared and hierarchal leadership, there are incentives to perform. According to Christopher Barnes, of the Military Academy at West Point and his collaborators in Mixing Individual Incentives and Group Incentives: Best of Both Worlds or Social Dilemma?, when individuals are given both individual and team goals, such as in shared leadership, members are placed in a social dilemma, and focus on individual rather than group

Pfeffer, J. & Sutton, R.I. (2007). Do Financial Incentives drive company performance? Harvard Business School

* Since management compensation is tied to firm performance, managers are incentivized to keep costs under control and maintain profitability. However, it is important to balance cost-controls with

Keeping employees motivated in addition to creating incentives and/or additional ways for employees to receive more compensation will create better performance overall within an organization. Contrary if company B gives their employees incentives to perform, without any motivational tactics they probably will not have as many top performances as company A, in addition the company may only seek short term rewards verses have long term success. Lack of motivation for employees within an organization, can cause long term damage for the company’s success. Different things motivate everyone; therefore there should be a system in place to keep employees motivated for the long term success of the company. In the MBM textbook under the concept of incentives, compensation, and motivation, there are a couple of different views of how it should be applied within an organization. We will discuss The Social Role of Profit, Personal Profit and Losses, and the way Market-Based Management view how incentives, compensation, and motivation should be applied and the things that effectively drive employees’ actions while at work.

Aguinis (2013), teaches us there are many factors that contribute to organizations complimenting an individual performance management system with a team performance aspect. Increased pressures for global competition, the need for product innovation, and the reduction of hierarchical levels in the organization allows for a natural extension of a system that focuses on individual performance only. This paper will analyze the team based reward system designed for the State of Georgia by Georgia’s Department of Human Resources. First, will discuss the positive and negative aspects of their reward system. Next we analyze the labor relations issues facing this reward system and uncover and legal implications the State may be facing. Finally, this paper will make a recommendation to the State of Georgia to improve its current reward system by also taking into account labor relations and legal implications.

An incentive pay program can reward employees who continue to produce superior work or encourage employees who already produce good work to best. Sometimes, use an incentive system when employees are lack of enthusiasm of getting down to work and improving things. If everyone in the same job classification gets the same pay, there is no real incentive to do an outstanding job (French, 1990). Various incentive plans used to motivate all employees such as production staff, sales staff, administrative staff and managerial and professional staff on an individual basis. To be improved employee work performance, the incentive pay programs need to be fairly matched with the employees’ expectation. Properly designed and maintained incentive pay program has the potential to increase employees’ productivity and work performance.