Hottapa 350 Words Or More Edwards Deming Often Referred To
Hottapa 350 Words Or Morew Edwards Deming Often Referred To As Th
Hottapa 350 Words Or Morew Edwards Deming, often referred to as the leading quality guru in the United States, and psychologist Alfie Kohn support the idea that incentive pay is not a motivator for individuals to do a good job. Yet economists argue that incentive compensation does work and as economist George Baker notes in his 1993 article in the Harvard Business Review titled "Rethinking Rewards," "The problem is not that incentives can't work but that they work too well." What does Baker mean? Discuss the importance of a well-developed compensation plan in attracting and retaining good employees and how to keep those plans from "working too well."
Paper For Above instruction
The debate surrounding the effectiveness of incentive pay as a motivator for employee performance has persisted for decades, highlighting contrasting perspectives from renowned scholars and economists. W. Edwards Deming and Alfie Kohn critically question the reliance on monetary incentives, suggesting that they often undermine intrinsic motivation. Conversely, economists like George Baker argue that incentives can be highly effective, but caution that their potency can lead to unintended negative consequences when misapplied.
Deming’s philosophy emphasizes the importance of intrinsic motivation, quality improvement, and employee engagement over external rewards. He believed that focusing excessively on incentive pay could diminish teamwork, creativity, and commitment to organizational goals. Alfie Kohn further supports this view through research demonstrating that extrinsic rewards may undermine intrinsic interest and reduce overall performance and satisfaction. Both scholars advocate for management strategies emphasizing meaningful work, recognition, and development opportunities instead of monetary incentives (Kohn, 1993; Deming, 1986).
On the other hand, economic theory suggests that well-structured incentive plans can align employee behavior with organizational objectives, boosting productivity and morale. Baker (1993) argues that incentives work "too well," meaning they may produce short-term gains at the expense of long-term sustainability. Over-reliance on incentives can lead to undesirable behaviors such as cutting corners or manipulating metrics. To mitigate this, organizations must develop comprehensive compensation plans that balance financial rewards with recognition, development, and job satisfaction.
A well-developed compensation plan is vital in attracting and retaining talented employees. Competitive salaries, performance bonuses, benefits, and non-monetary rewards like flexible work arrangements can enhance organizational appeal. Effective plans also foster fairness and transparency, which build trust and commitment among employees (Milkovich & Newman, 2020). However, to prevent plans from "working too well," organizations should focus on aligning incentives with long-term company values and goals, emphasizing quality, teamwork, and ethical behavior instead of solely short-term financial outcomes.
Furthermore, integrating non-monetary incentives, such as recognition programs, career development opportunities, and fostering a positive organizational culture, can complement monetary rewards. These approaches support intrinsic motivation and reduce reliance on incentives that may provoke counterproductive behaviors. Regular evaluations and adjusting compensation strategies in response to organizational changes and employee feedback are essential to maintaining an effective and sustainable reward system.
In conclusion, while incentive pay can be a powerful tool for motivating employees, it must be carefully designed to avoid adverse effects. A well-crafted compensation plan that balances monetary rewards with intrinsic motivators and aligns with long-term organizational objectives can attract and retain quality talent while minimizing the risks of "over-incentivizing." Managers must remain vigilant to ensure that incentives enhance, rather than compromise, organizational integrity and sustainability.
References
Deming, W. E. (1986). Out of the crisis. MIT Press.
Kohn, A. (1993). Punished by rewards: The trouble with gold stars, incentive plans, A’s, praise, and other bribes. Houghton Mifflin Harcourt.
Milkovich, G. T., & Newman, J. M. (2020). Compensation. McGraw-Hill Education.
Baker, G. P. (1993). Rethinking rewards. Harvard Business Review, 71(3), 34-45.