Linking Strategy, Performance, and Incentive Pay

Описание: Incentive pay—tying worker pay to performance—is popular. The problem is that doing so is easier said than done. Research on incentive plans is sketchy, but one older study found that just 28% of 2,600 U.S. workers said their companies’ incentive plans motivated them. One expert found that employees don’t see a strong connection between pay and performance, and their performance is not particularly influenced by the company’s incentive plan.

One problem is that many incentive plans incentivize the wrong behavior. Another big reason for incentive plans’ often-dismal results is that incentives that may motivate some people won’t motivate others.