Analysis Report- why incentives fail

Analysis Report

Punished By Rewards – Kohn

Why Incentives Fail

The first reason that Kohn has identified is that incentives are sometimes not necessary. This is true in situations where the workers and employees are already performing effectively; however with the incentives, it can cause more conflicts and issues than improvements in performance, . It is important not to distract the workers from their performance by giving them distractions with interfere with the main purpose of their work.

Secrecy is another reason why incentives may not work effectively. Other workers may feel that they are not earning as much as other people in the same position and therefore do not put their full effort into their work. This is why companies should be open about their salaries, rewards and bonuses. Incentives should be offered equally to give all employees the chance to earn the incentives. Keeping these incentives secret and only available to a select few, will create a lot of controversy between employees and will make others feel discriminated and separated from the organisation.

When an organisation wants a certain goals completed and will offer to reward those that can help reach these goals, the reward must always match the performance and efforts of the employees. If the extra performance and effort was not matched with a satisfactory level of reward, the employees will feel cheated and unappreciated. Both these feelings will cause distrust and ignorance to the word of the organisation. Therefore it is important to always fulfil your end of the deal, to ensure that the next time the organisation requires extra performance, the employees will happily contribute.

Most commonly in less develop companies and businesses; it is unwise to provide large financial incentives to employees. This is because it will limit the amount of profitability and therefore will reduce the growth rate of the company or business. Therefore incentives must be affordable and reasonable. If monetary incentives are too expensive, other types of incentives and recognition can be used. Though money is usually the main purpose of working, other rewards can also be used.

The next problem about incentives and rewards is that rewards are sometimes too big or too small. Kohn states that small rewards will have insignificant affect too all, and rewards that are too big will be given to fewer people causing conflicts in the workforce. If the company can provide a large sum of rewards to everyone, the workers will not complain however the company will have lost a lot of profits. Therefore, if a reward were to be given to the employees, there must be an effective and efficient balance that maximises the effectiveness of the rewards without leaving others unrewarded.

There are rewards for short term and long term performances. Both benefit the employees in different ways. Short term rewards are usually provided to individuals with high performance standards. However these rewards will soon cause conflicts if the same people keep receiving the rewards. Therefore the organisation may create a system which prevents the same people receiving the rewards in a period of time. However this will cause employees that have already earned the reward to relax and put less effort into their work. Long term rewards are also very conflict as more factors must be taken into consideration which can cause arguments. Rewards are not always positive and therefore should only be used when in the right occasion.

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me people receiving the rewards in a period of time. However this will cause employees that have already earned the reward to relax and put less effort into their work. Long term rewards are also very conflict as more factors must be taken into consideration which can cause arguments. Rewards are not always positive and therefore should only be used when in the right occasion.

Rewards are giving to those who deserve the reward. But according to , it is the people who determine the basis of performance, which can determine whose is deserving of the reward. This can cause bias and favouritism, which will cause conflicting perspectives thus creating controversy over the rewarding system. The people that are not rewarded and feel they deserve the reward will begin to question the rewarding system and consequently, lose trust in the organisation. This will cause more serious problems such as poor performance and damaged connection between employees and the organisation.

Kohn’s 9th reason why incentives fail is very in depth. It is about the way we think about money and the reason why money has consumed our lives. Since we were young, we have been taught and developed to believe money is extremely important. Money is needed for almost everything and therefore we must earn money to survive. This has made money a great motivator in the world. There are however downsides to having money as a motivator, such as criminals and breaking laws for money. This is the reason why people believe money has corrupted the world; however money can also be used to positive motivation. But Kohn has questions the power of money as a motivational tool. Do people really get motivated by the incentive of monetary rewards? There is a certain amount of need for money, but there also is a limit to where the need for money turns into greed for money. Therefore some employees may feel that they may no longer be interested in the extra monetary incentives. Thus Kohn talks about how incentives may not be as effective as presumed, causing performance to reduce as employees are no longer motivated by monetary rewards.

There are also cases where incentives also act as punishment for those that do not earn the rewards. People will feel bad about missing these opportunities and will feel stressed and worried. Rewards and incentives will also create competition between each employee. This will sometimes ruin the teamwork and affect the way each employee assists and aids others.

Kohn’s 14 reasons, all explain how incentives and rewards can distract or ruin the organisation from reaching its highest performance. There are countless factors to consider when identifying the most effective and efficient rewards, and the rewards system must be carefully planned.

4 recommendations

When trying to avoid incentives having a negative effect on the organisation, there are many ways to improve the chances of an effective incentive and rewards system. My first recommendation to avoid this type of issue is to only provide incentives and rewards when it is required. Making sure that the incentives are actually needed is important to maximise the effective of the incentives and can also save the profits…

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