Monday 22 July 2019

Do Incentives Work?

Posted by at 5:36 PM in

In a word, NO! Why do we try to incentivize workers? Is it because we want more out of them than we would otherwise get?

The definition of incentivizing has to do with motivating others. We try to motivate them to work harder, smarter, more efficiently achieving better results. So, we attempt to motivate by offering percentages of revenue, or profit, or of equity as a carrot in the hope their behavior changes because of it. Does it work? NO.

Workers don’t seem to change behavior to get the little bit more we offer. Either the job and the pay motivate them, or it doesn’t. In time, the worker views the incentive as a regular part of their pay that they deserve whether or not they perform at a higher level. They sometimes blame others, including the owner for being the roadblock to obtaining their performance pay.

Excuses are given … “it’s so and so’s fault,” or “you are working me too hard in other areas,” or “I tried, so I should get it whether or not I met the mark,” and on it goes. My advice to owners considering incentives is - don’t do it! Save your money! Pay your workers well, set their performance requirements, and hold them accountable for results.

Reference: The Profit Maker: Make More Money Than Ever Before Managing Your Business Like a Pro!