BUS576-2

Financial Incentives and Decision Making 

Image Source: http://www.maclife.com/article/news/microsoft_offers_financial_incentives_app_developers

I believe most of our ears perked up when reading chapter 5 because this week's reading and EIAs were about money. More specifically this week was about how financial incentives are used to increase employee motivation and how those incentives succeed and sometimes fail. According to Pfeffer and Sutton a financial incentive is a tool used for aligning employee behavior with an organization's goals. This can be done by essentially offering employees better or more pay to work harder. This is an interesting concept to examine because superficially it sounds like a great idea but financial incentives can carry a number of faults. For example, Pfeffer and Sutton use an example of trash collectors who received an 8-hour work day's pay for completing their work as fast as they can. This resulted in trash collectors carrying illegal amounts of trash and drying unsafe trucks. Before installing financial incentives companies should be very careful what they wish for. To assist with the understanding of individual motives there were some great Ted Talks this week in the EIAs dealing with motivation and psychology. It is important for companies to first understand how to best motivate employees before putting into practice a financial incentive system. 

Some of my outstanding questions and thoughts this week have to do with what money can buy us. Pfeffer and Sutton say that people are motivated by money but I would like to dig a little deeper and examine what people buy with that money. Of course there are the basic human needs, such as housing, food, etc, but what else motivates humans besides money and words of positive affirmation? Also, I would like to point out that financial incentives are likely most successful in capitalist economies where social capital is valued less than monetary capital.

I found this interesting infographic that easily and attractively displays what really motivates employees based on Gallup research. This Gallup research supports the research presented by Pfeffer and Sutton; financial incentives are not the only incentives that lead to productive and happy employees. The best method of motivating employees is a mix of positive affirmations, acts of service, quality time, physical touch, and tangible gifts.

Image Source: http://www.entrepreneur.com/article/225560

My personal thoughts for the week are similar to the comments I made on the Week 2 Discussion VoiceThread. This summer I have three jobs. I have two unpaid internships and I waitress. For the internships there is no chance of financial incentive. The only reward or incentive I receive is words of affirmation and hopefully I will have two strong letters of recommendation from my bosses when I graduate from Chatham and start job searching. On the other hand, I waitress and the only money I make is tips. Waitressing relies heavily on finical incentive. I do a lot as a waitress to ensure that I receive a good tip from a table. For example, studies have shown that female servers who wear makeup usually receive higher tips and I am nice to tables even if they are rude to me in hopes that I will still receive a high tip. Here is an interesting article from Psychology Today about what waiters can do to receive higher tips. Also, note how the article is gender biased. There are tips on here for women such as touch customers or wear accessories, that are not suggested for men. Just something to think about!