Most firms, especially sales teams typically set out relative incentives to improve productivity. While this works when majority of the employees tend to be selfish, it may even backfire when they are more caring, as happens at non-profit firms or ones that emphasize corporate social responsibility. A study was conducted to gauge a few behavioural tenets. One objective was to ascertain whether the selfish people in the ranks worked harder when relative incentives were put in place. Another was whether the performance of those unselfish would slack off in comparison to the selfish ones. The third was whether overall productivity would actually go down as a result of only few being rewarded, leading to collusion towards non-performance. To answer the first two questions, indeed the selfish ones outperformed the caring employees by about fifteen percent. Collusion did also take place, but surprisingly more so among the selfish ones than others. However, this collusion only took place when there was exactly one such selfish member in the team as they tended to be more strategic in approach. The moment, their numbers swelled to two or more, they became more ruthless and in turn productive. This is a lesson in the field of talent management which team leaders must take care of. While relative incentives work up a treat when employees are in competition from day one, it tends to slack off at places where the focus is on collaboration and teamwork.

Source:https://insight.kellogg.northwestern.edu/article/do-relative-incentives-work/amp

Uploaded Date:14 December 2017