Week Five

Week Four

Week Three

Week Two

In this weeks reading I found the information surrounding financial incentives to be the most interesting. As someone who works in a department where financial invectives run the show, I was excited to learn the in and outs of their actual effectiveness.

A. According to The Business Dictionary, a financial incentive is a monetary benefit offered to consumers, employees, and organizations to encourage behavior or actions which otherwise would not take place. As financial inceptive motivates action which otherwise might not occur without the monetary benefit. An example of a financial incentive could be a manager rewarding a department with a higher commission rate for exceeding x amount of sales.  In this case, the sales person may be more motivated to sell because by exceeding x, he or she will reap the benefits of their additional hard work through a greater financial reward.

B. The concept of financial incentives are important to each and every one of us in the MBA program as current or future, employees and or managers. It is invaluable to know what works and what doesn’t and based off of the evidence based research in our text- financial incentives can and do work but only in certain situations under certain executions.That being said, the text refers to three avenues in which incentives can enhance organizational performance if well designed and applied. See below:

1.Financial incentives can motivate more effort, a motivational effect.

2. Financial incentives can provide people with information about what the organization values  and what its priorities are, an informational effect.

3. Financial incentives can presumably attract the right kind of people and repel the wrong kind, a selection effect.

C. The three types of effects listed above that could come from the offerings of financial incentives have me considering them in a very new light. Over all, however, I question ideas surrounding motivation. In any case, money motivates. How can it be determined whether or not said motivation comes from interest in bettering the company or ones image as opposed to just trying to "bring home the bacon?" Further, if you are hired to do a job and to meet a job description, should you really be paid additionally for doing the job well? Shouldn't that be the very minimum expectation of us at our work place... that we do the job we were hired to do well?

E. To me, this course has made me realize the importance of being able to sift through research and find the "good stuff." I can't recall which company uses the slogan, "if it's on the internet, it must be true!" but growing up as a millennial, this really seemed to be the general belief. Reading the course text has really opened my eyes to another way of approaching research and other studies. I am looking forward to continuing to learn more ways and approaches to making sound decisions. 

Sources:

http://www.businessdictionary.com/definition/financial-incentive.html

Pfeffer, J., & Sutton, R. I. (2006). Hard facts, dangerous half-truths, and total nonsense: Profiting from evidence-based management. Boston, Mass: Harvard Business School Press