Incentives LO1118

Mon, 08 May 1995 23:00:28 EDT

Replying to LO1081 --

This is in response to John Snyder's post on incentives,
where, he seemed to say that incentives are not a good
thing . . . "Even if one is determined to live within
reductionism, there are less damaging ways to reward than
giving incentive pay."

In the spirit of inquiry, which is what I assume this
network strives for, here is my experience with incentives.

Several years ago, I worked for a consulting company of
less than forty people, when the owner announced an 3%
bonus for all billable work sold by anyone in the firm.
For the first three years of the program, I loved this
incentive - I earned many thousands of dollars each year,
worked harder than I would have without the incentive, and
developed whole new clients for my company. This is not
unusual with incentives - I worked with enough people to
believe they are good motivators for opening up new
frontiers. The incentives allowed me to buy a new house and
provide a better living for my family.

On the other hand, the incentives caused a lot of
problems in the later years. People argued over the share
of the bonus ("I contributed to that proposal . . No, you
didn't, you just came to the meeting, and so on.")
I found myself giving up some of my share to keep people
happy and to be a good boss. I came to the conclusion that
the incentive system had effectively pitted us against
each other! The owner of the company came to the same
conclusion, but he didn't know what to do. He wanted to
reward extra effort and had seen the incentives pay off
handsomely with me and a few others. If he eliminated the
incentives, he believed there would be little motivation to
put in the extra hours and suffering that it took to develop
clients. In my case, this was certainly true. To me, one of
the major motivators in small business is the opportunity to
make quantum leaps in income. Business owners provide these
kinds of incentives, and in fact some of them enjoy
distributing incentives - I know my old boss did.

I guess what I am saying is that incentives are not
uniformly bad or indicative of exploitative management.
Yes, they cause trouble, but are there any systems that

Charlie Fleetham