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Costly ways firms misuse employee incentive programs

Jared Bilski
by Jared Bilski
January 26, 2014
1 minute read
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When employee incentives are used correctly, they can have a substantially positive impact on the entire workforce.

Research shows that incentives can significantly increase workers’ motivation and productivity.

Plus, they allow workers to reap the rewards of what they achieved. All too often, however, many employers try to use incentives in ways they’re not meant to be used – and that can do more harm than good.

Here are three such examples:

1. To fix larger problems

Granted, a little incentive can go a long way toward getting employees to go above and beyond their traditional roles, but firms have to be careful.

All too often firms will dangle a carrot – cash, extra vacation time, etc. – in the hopes employees will do great things despite problematic processes and limited resources.

When an entire company process could use an overhaul, employers would be better suited to use those incentive funds to address the root problem and correct it.

2. As a buffer

Sometimes employers will use incentives as a buffer against poor-performing employees.

The thinking is that top-performers will pick up their slack and garner the rewards. In many cases, these companies offer incentives for tasks that should be part of everyone’s job description.

When slackers aren’t carrying their weight, it’s not fair to other workers – and it means the business isn’t running as efficiently as it should be.

3. To avoid regular feedback

Another common misconception about incentives: They eliminate the need for regular manager feedback.

Even though employees know what they’re trying to achieve, nothing replaces having a supervisor regularly checking in to let the worker know how things are going.

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