Article Summary
Alfie Kohn (Author and Lecturer in education and management) clearly questions the value of incentive plans as a mechanism to enhance organisational productivity. In this article (written as a thought piece for the Harvard Business Review) he draws on a wide range of studies that are either inconclusive, or open to interpretation to challenge managers to re-think the pervasive use of financial incentives inside organisations.
Kohn is critical of the use of simplistic behaviourist models of staff motivation and considers the psychological assumptions they are based on to be flawed. Additionally Kohn takes issue with the widespread use of such plans and the tendency for management to look to the implementation methodology of an incentive plan when it fails, as opposed to the underlying validity of incentive plans in general.
In order to support his argument Kohn cites a number of studies that use a variety of laboratory methods to validate a relationship between reward and productivity. Kohn draws many of his conclusions from the absence of such a relationship and goes on to argue that this absence of evidence in fact constitutes a negative correlation.
Kohn examines some of the literature around the link between executive remuneration and corporate profitability and openly questions the author’s conclusions, based upon re-interpreting the evidence to support his hypothesis.
Based upon a series of both direct and ‘meta’ studies, Kohn describes a six point framework that examines the downside (and in his view “hidden costs”) of an extrinsic incentive program:
Pay is not a motivator
First quoted by W. Edward Deming, Kohn places the perceived value financial remuneration well down the list of employee priorities
Rewards punish
Koh ...