please respond to each student 

student 1

Unit 8 Discussion

Part 1

In reviewing “Examining the Evidence: Money as a Motivator”, research evidence identifies a relationship between financial rewards and performance.  Large financial incentives could increase motivation to a higher than optimal level that could result in reduced performance.  While small to moderate financial incentives may work best when the tasks are noncognitive and employees are not required to learn specialized skills or work collaboratively with others (Neck et al., 2020).

The strengths of linking financial incentives to tasks that require creativity, problem-solving, and memory could increase performance and encourage and motivate other employees to participate.  With multiple studies showing that financial incentives boost performance, it also produces an environment of excitement and participation.  Bachmann and Ligon’s article (2022) shared that when employees see their friends get bonuses, they didn’t want to just sit on the sidelines.  It created a high level of energy and boosted the discretionary efforts of employees.

The limitations of linking financial incentives to tasks that require creativity, problem-solving, and memory could encourage unethical behavior.  Employees could end up falsifying information or fabricating it just to receive the financial reward.  According to Wharton (2011), when strong financial incentives are in place, many employees will cross ethical boundaries to earn them, convincing themselves that the ends justify the means.  Of course, this could end up harming the organization as well as the employee in the long run.

I personally favor non-financial motivators than financial.  I think they get to the heart of what an employee really wants and can have a long-lasting effect.  In fact, Gartenstein article (2019) shows that nonfinancial rewards are what distinguishes one job from another, inspiring a higher level of loyalty and creativity.  In one of my previous positions, we had opportunities to earn cash awards or receive personal development training of our choice.  I valued the training more than the cash award because my family benefitted from it as well as the job.  In addition, it later positioned me to be a better candidate for a promotional opportunity that came up.  There will be employees who are not motivated by money, but by company culture, learning opportunities, advancement opportunities, or job security. (Gartenstein, 2019).

Part 2

My score on self-assessment 5.1 was 47.  The interpretation in that range states;

“This implies some uncertainty over your motivation to lead.”

I agree with that interpretation.  As I mentioned in one of my earlier assessments, I occasionally overthink the right course of action when in a leadership role.  This causes me to hesitate in some instances.  However, when time is a factor or the situation appears to be going in the wrong direction there is no hesitancy.

REFERENCE LIST

Bachmann, H, & Ligon, R. (2022, February 25). The Powerful Role Financial Incentives can play in a transformation. The Business Post. Retrieved on 2/28/2022 from https://businesspostbd.com/opinion-todays-paper/2022-02-25/the-powerful-role-financial-incentives-can-play-in-a-transformation-2022-02-25 (Links to an external site.)

Gartenstein, D. (2019, May 8). The Financial & Non-Financial Theories of Motivation. Retrieved on 2/28/2022 from https://bizfluent.com/info-7962820-financial-nonfinancial-theories-motivation.html (Links to an external site.)

Neck, C. P., Houghton, J. D., & Murray, E. L. (2020). Organizational behavior a skill-building approach (2nd Ed.). SAGE.

Wharton (2011, March 30). The Problem with Financial Incentives and What to Do About It.  Retrieved on 2/28/2022 from https://knowledge.wharton.upenn.edu/article/the-problem-with-financial-incentives-and-what-to-do-about-it/

Student 2 

Part 1

When adding financial incentives, there can be many benefits and limitations when motivating employees. It is very important as a leader to be cautious with monetary incentives because of how employees will respond when completing the task. “In short, these findings suggest that financial incentives—especially very large ones—could increase task motivation to a higher than optimal level, leading to “choking” under pressure and reduced performance” (Neck 135). Employees can start to feel a lot of pressure on them if they are needing to learn new skills and apply them to the project with a large monetary incentive. Employees could even feel entitled if the incentives are continual. “In a study published in 2002, Ernst Fehr of the University of Zurich and Armin Falk of the University of Bonn showed that monetary incentives targeted at promoting moral behavior may achieve the opposite and, in fact, undermine moral behavior” (Feser). There can be many limitations if leaders do not communicate monetary incentives wisely.

“Cons to Using Monetary Incentives to Motivate Employees

If used continually, a view may be created that they are an entitlement

Risk of unintentional consequences. For example, if a sales rep’s bonus is solely based on revenue and not profitability, goods/services could be sold below target gross margin.

Risk of de-motivating employees (for example where bonus is paid to one employee but not another)

Cost of implementation: resources are required to set up and track incentive programs

Short term focus: Monetary schemes can become very short term in their focus. Long term attitudes and behaviour may be more effectively addressed via non-monetary incentive schemes” (CooneyCarey).

With many limitations of monetary, there are also some benefits. “For example, monetary incentives are effective in encouraging improved sales activities, such as incentivizing insurance agents (individually or as teams) to sell insurance products, or in investment banks” (Feser). Incentives usually work well with sales jobs because it is mostly based on a performance culture.When using incentives, leaders must communicate effectively and efficiently with the desired outcome known to every person involved. “Monetary incentives tend to be most effective when there is a clear and immediate causal link between an individual action and the desired outcome, and when the desired outcome is easily measurable” (Feser).

“Pros to Using Monetary Incentives to Motivate Employees

Improvement of employee morale and staff retention levels

Proven mechanism for boosting short term productivity

Motivation to reduce problematic employee behaviours

Compensation mechanism for top performers

An equitable payment system for employees, i.e. extra effort = extra money

An effective tool to attract top talent in the recruitment process

May provide employees with an element of control over their income” (CooneyCarey).

Part 2

I scored a 22 in the self assessment which means that I have a low level of change resistance. This does not surprise me because I like to try new things and change up my routine in most cases. Although, I do like some things in my life to have a normal routine.

Sources: 

1. Claudio Feser, et al. “The Limits of Monetary Incentives.” ChiefExecutive.net, 28 Apr. 2017, https://chiefexecutive.net/the-limits-of-monetary-incentives/.
2. “Pros and Cons of Monetary Incentives.” CooneyCarey, 3 Nov. 2016, https://www.cooneycarey.ie/2016/11/03/pros-and-cons-of-monetary-incentives/.
3. Neck, Christopher P.; Houghton, Jeffery D.; Murray, Emma L.. Organizational Behavior (p. 135). SAGE Publications. Kindle Edition.