Will Work for Incentives
Greed is good. It's not just an iconic line spoken by Gordon Gekko, the fictional character played by Michael Douglas in the movie Wall Street. When it comes to business it rings fairly true. Money, along with power, probably motivates more employees and builds a bigger, stronger business than praise or pretty offices. That's why some companies wave carrots, like cash or other bonuses, in front of employees' faces to get them to work just a little harder.
And, the facts prove it works.
According to a study published by the nonprofit organization The Incentive Research Foundation, properly constructed incentive programs can increase performance by anywhere between 25 percent and 44 percent. But, they are only effective if done in ways that address all issues related to performance and human motivation.
The paper, "Incentives, Motivation and Workplace Performance: Research & Best Practices," which was conducted by researchers for the International Society of Performance Improvement and funded with a grant by the Incentive Research Foundation, analyzed incentive programs by conducting surveys and interviews with business executives whose organizations use incentives.
The study noted when programs are first offered for completing a task, a 15 percent increase in performance occurs. When asked to continue toward a goal, research showed their performance soared by 27 percent due to incentive programs. The study also found that incentive programs that run for a year or more produced an average 44 percent performance increase, while programs running six months or less showed a 30 percent increase. Programs of a week or less yielded a 20 percent boost, according to the research.
The study also identified five conditions under which incentive programs work best: current performance is adequate; the cause of the inadequate performance is related to deficiencies in motivation; the desired performance type and level can be quantified; the goal is challenging but achievable; and the focus on promoting a particular behavior does not conflict with or override everyday organizational goals.