Incentives in the Workplace: Is Money the Key?
INTRODUCTION
While it is true that money matters in terms of financial gain and the gloriously pursuit to excel in accrual of revenues in business, research study and professional observational critiques have shown that monetary incentives in the workplace are not the key factor which motivates people in the workplace setting. The main article of referential focus, entitled ‘Social Incentives in the Workplace’ by economist research analysts Oriana Bandiera, Iwan Barankay, and Imran Rasul of the London School of Economics conducted a study which measures worker productivity as associated with rewards. Bandiera, Barankay, and Rasul (2010) discovered some startling evidence from their data findings and state “The distribution of worker ability is such that the net effect of social incentives on the firm’s aggregate performance is positive” (p. 417). Thus suggesting that money as a motivational factor in the work arena, is not the sole key to stimulate productivity. The article reviews this concept by discussing worker, and co-worker identities, abilities and productivity-level using a conceptual framework model. The core summary of the article entails empirical evidence that social ties are significantly relevant to workplace incentives.
So, is money the key to incentives in the workplace? Many think not. One main reason in how the Bandiera et al. (2010) research team’s article keenly correlates to an exploration of doubting that money is a magic bullet to slay all laziness in the business world, is because they examine negative and positive “effects of social incentives” (p. 420). In uncovering empirical evidence the researchers noticed that if a worker works alongside a friend, who is more skilled than the friend with lesser ability, the less-skilled worker will improve his or her performance in terms of productivity. Data in the article bears out the facts of this statement, which obviously holds more weight over a mere assumption. In light of this fairly recent evidence, the idea of money being the primary key as a stimulating incentive in the workplace, has received its timely demise.
Other Research Discourse on Money-Based Incentives
Bandiera, Barankay, and Rasul are not alone in their assessment that money does not form the single most masterful key, to opening the doors of incentives in the workplace. Another researcher in the field has also published a recent presentation on the topic in the peer-reviewed professional journal ‘Organizational Behavior & Human Decision Processes’ entitled “The Surprisingly Low Motivational Power of Future Rewards: Comparing Conventional Money-Based Measures of Discounting with Motivation-Based Measures.” In it researcher Ebert (2010) reviews the idea that the behaviors of workers in a business setting do not necessarily reflect money-based motivational promises, as an incentive. Ebert (2010) developed an observational overview of applying six studies, in which he ascertained “discounting measures are poor measures” upon which people expect to receive future rewards” (p. 71). By utilizing ‘Present Value’ (PV) and self-reports to map out a way to intelligently evaluate his interest in monetary incentives, Ebert employed a variety of so-called ‘valuation strategies.’ Ebert is not alone. Still other professional analysts have documented commentary on the topic.
Analysis from the Healthcare Sector
Financial incentives for workers have been a rather hot topic on the lips and minds of a myriad of business management figures, corporate stakeholders, and highlighted in several studies, articles, and publications. Although no ‘blog’ type articles or write-ups are cited herein, it is no secret that the ‘Harvard Business Review’ features many current presentations which discuss why money as a motivational incentive does not primarily hold the key to success, in planning an organization’s workplace culture. In fact, a most recently published article which relates to the issue at hand appearing in the ‘International Journal of Health Policy and Management’ focuses upon how the health care design of their particular business workplace must realize that goals for better outcomes, in employee behaviors, must consider different kinds of rewards other than money. For example in a commentary regarding the case and concern of development and improving workplace wellness programs Van Busum and Mattke (2013) argue that money incentives only represent a single component for incentives, and emphasize that “other types of positive reinforcement” like “peer pressure” also can actually be effective (p. 311). However, at the end of the day socially driven incentives may provide one of the greatest motivational tools in the business realm, for all management and professional stakeholders to wield.
Conclusion
Solidarity which is born of necessity and invention may help provide a workable rubric for management and organization’s to follow in designing productivity standards to motivate employees and workers. People like to feel happy. If they are happy working alongside a friend who is pro-actively more skilled at his or her job, why not consider this factor as a proof that money is not the key to patronizing incentives in the workplace? Money can certainly be a motivating factor, and indeed is required to live. But the literature contribution that Bandiera, Barankay, and Rasul have collectively made in their article about social incentives in the workplace is an excellent resource to bring to the table for planning and matching human resources to jobs. Every sphere of business, in sectors such as agricultural industry, public or private, and including healthcare organizations can benefit by learning money is not the chief key to incentives in the workplace.
References
Bandiera, O., Barankay, I., & Rasul, I. (2010). Social incentives in the workplace. Review Of
Economic Studies, 77(2), 417-458. doi:10.1111/j.1467-937x.2009.00574.x
Ebert, J.J. (2010). The surprisingly low motivational power of future rewards: Comparing
conventional money-based measures of discounting with motivation-based measures
[Abstract]. Organizational Behavior & Human Decision Processes, 111(2), 71-92.
doi:10.1016/j.obhdp.2009.10.003
Van Busum, K., & Mattke, S. (2013). Financial incentives: Only one piece of the workplace
puzzle; Comment on “Corporate wellness programs: implementation challenges in the
modern American workplace.” International Journal of Health Policy and Management,
1(4), 311-312. *Link: Retrieved from {file:///C:/Users/Use%20this%20one/Downloads/IJHPM27911384547400.pdf }.
