Question

The factor of incentive scheme fail is because of rewards rupture relationships. Explains

(in 300 words)

Answer 1

Though incentives increase employee productivity and zeal to achieve their targets temporarily, it tends to fail in the long run. The incentive system creates a sense of competition among the peers where everyone feels that “Winner takes all”. The employees are ranked against each other and this tends to create a negative environment. The more these incentives are publicized, the more the negativity sets into the people on the wrong end of the system i.e. the lower half. This leads to a lack of cooperation and complete loss of the feeling that one belongs to the group. Each employee wishes to outsmart and outpace each other rather than helping each other and making sure the organization grows.

The deteriorating teamwork and increased focus on individual goals lead to a negative impact on system growth and improvement. Instead of focusing on the organization’s goals as a group, each employee becomes short-sighted and completely focused on his/her goal. For example – Two salespeople in the same territory will fight out each other for the same lead. Though they belong to the same group they will feel negative for each other. If they work as a team, share information and agree to share the credit, there may be better chances for them to close the lead.

Further, the incentive system deteriorates the relationship between managers who must implement the incentive system and manager it for the subordinates. The managers are seen in the bad light or punishing by those employees who do not do well. The employees in these cases tend to hide their shortcomings and are not open to sharing it with the managers. Since the manager does not know the problem, he/she will never be able to help the employee.

Hence an incentive scheme ruptures relationships leading to organization troubles rather than organization growth.