Good Article Review On Do Financial Incentives Drive Company Performance?

Plenty of effort and attention is accorded to financial incentives. According to the writer, many people are interested in writing and reading about the topic of compensation. There are also consulting firms such as Mercer and Hewitt Associations who make money by offering advice concerning the appropriate way to design remuneration systems that motivate, retain, and attract employees. Company executives devote a lot of funds and time dealing with issues amongst the workers regarding compensation complaints. The intense devotion to getting the wage system right generates intertwined and shared beliefs of the mechanisms that motivate people in the workplace (Financial Incentives, 109). The article views financial incentives as a fundamental tool for aligning the personnel’s efforts with the enterprise’s objectives. Hence, it formulates an explanation of what the remuneration can do for the company’s performance.
The concept of using financial incentives to motivate people to work towards enhancing the performance of the industry is correct. The employees need something to look forward to so that they can keep working hard. The technique acts as an aversive to bribe individuals to expand their efforts. The writer puts forward three essential avenues that financial incentives can improve the firm’s outcomes or if they are mishandled can interfere with the results. First, compensation acts as a motivating factor. It can also be used to measure the value of the company. Lastly, it offers a selection effect that repels the wrong people and attracts the appropriate lot (Financial Incentives, 113). The three strategies given by the article indicate the usefulness of financial incentives.
Remuneration is no doubt an important strategy for retaining and attracting the workforce (Financial Incentives, 111). However, I disagree with awarding all employees hefty salaries just to motivate them to work harder. People should earn what they get to avoid them from becoming lazy and sluggish in their operations. When individuals see that the salary is too good, they will tend to lower their work rate or maintain it at the same level to avoid doing more for the same pay. The assumption is provided by Taylor’s principle of scientific management where the workers will develop a habit called soldiering.
The article failed to highlight that the management should not only rely on financial incentives to boost the performance of the workers. An excessive payment system may end up doing more damage than good considering that the primary purpose of a profit-making organization is to increase its revenues. They are other ways that the leadership can use to attract, motivate, and retain the appropriate set of people such as training, development, communication, teamwork, etc. The management should adopt the plan that best suits the company in the long run without inflicting any harm to other stakeholders (Financial Incentives, 128). As far as the essence of financial incentives in maintaining the outcomes of the organization is concerned the authors did not fail to mention any critical elements.
The piece would be useful to the executives in different organizations so that they can diagnose problems in their compensation systems and eliminate dissatisfaction amongst the laborers. The managers are requested to worry about the distribution of remunerations, quantity, guidelines, and the problems that can be solved by financial incentives. They should understand the different signals given by rewards since they are double sided (Financial Incentives, 116). The compensation system should recognize outstanding workers and adopt a high level of fairness. Human capital is a crucial element in the prosperity of the firm. The resource possesses the skills and knowledge required to carry out the daily operations. Human resource management should keep track of the attitudes and activities of workers to identify issues before they get out of control.