Question

Affects Employee Engagement, Satisfaction, and Trust Most managers would agree that motivated, productive employees are crucial for organizational success, regardless of company size, industry, or corporate strategy. The question is how to motivate them. Offering employees performance-based incentive pay is one common approach, and it usually

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and trusting management less. This contradicts previous studies, in which profit-sharing initiatives have been associated with positive employee outcomes Our analysis did reveal some important nuances about profit-related pay. Specifically, any positive effects are dependent on the extent to which profit-related pay is available to a large proportion of the workforce. At low to medium levels of employee participation in profit-related pay, we found lower levels of job satisfaction, organizational commitment, and trust in management. However, at high levels of employee participation, we found higher levels of employee well-being. When it comes to share ownership, however, we found a direct negative relationship with job satisfaction and no significant relationships with employees' commitment and trust in management High employee uptake of share ownership also revealed no significant relationships with employee well-being Of the three incentive pay schemes examined, only performance-related pay was positively associated with the perception that work is more intense. In many ways this makes sense: People may feel individual pressure to work harder in order to obtain an individual reward. But, on a concerning note, we found that experiencing this kind of pressure partially, but not completely offset some of the positive influences performance-related pay can have on job satisfaction, organizational commitment, and trust in management What should managers keep in mind? The positive relationship between performance-related pay and all three well-being outcomes indicates that employees may see increases in pay as a reasonable and even positive trade-off for contributing toward organizational success. Contrary to what many employers believe, organization-wide incentives such as profit-related pay and share-ownership may not generate such positive effects, as they were found to have negative relationships with employee well-being. The exception to this argument is the case of high employee participation in profit-related pay, where, if the mechanisms for distributing organizational profits are perceived to be equitable, more employees are likely to benefit and consequently experience job satisfaction, organizational commitment, and trust in management

But our results regarding work intensity and individual-based incentive pay should give managers pause. In some circumstances, performance-related pay may be experienced as a burden that only provides extra pay for workers through an intensification of the work process. This raises critical questions regarding the extent to which individual-based incentives can influence employee well being in a sustainable way

Answer 1

Out of the three incentive pay schemes namely individual performance linked incentives,organization wide profit sharing and share ownership only performance linked incentive seems to have a positive impact on job satisfaction,organizational commitment and trust in management.The other two methods viz.organization wide profit sharing and share ownership are more likely to have a negative impact on employees as these methods are perceived by employees as unfair pay distribution and contribute more towards overwork and stress.An exception to this would be only an idealistic situation where profits are equitably distributed without any bias/polarization and profits are thus available to a large chunk of the workforce.