Jeffery Pfeffer’s excerpt, “Sins of Commission: Be Careful What You Pay For, You May Get It,” shows how commission/money incentive based systems do not work in the real world. Time and time again these systems prove to go awry and end up costing more than they’re worth. Money is a short-term motivator, it’s time for companies to think beyond that and work toward long-term solutions to employee satisfaction, which leads to a more efficient and effective workforce.
Pfeffer uses several examples of failed programs that use money to incentivize their workforce. One example is incentive pay for teachers, where student test scores on standardized exams are used to determine a teacher’s effectiveness. Studies have shown that the easiest way for a teacher to obtain the incentive pay and prove that they are performing their job up to standards is to provide questions and/or answers to test questions beforehand. This system not only cheats the teachers, but it cheats the students as well of truly learning the material.
One might suggest taking all of these corner cutting methods into account when developing incentive programs, but that is unrealistic. One cannot predict all of the ways people might skirt the system in order to receive the prize, but as Pfeffer points out, the whole point of incentive systems is to simplify things. When we start making them so complicated that not even the people who create them can remember all of the rules, what is the point?
Why do companies have such a hard time getting to the root cause of problems? It seems that we’ve become so accustomed to quick fixes that that’s all that we do these days, and quite often we even need a fix for the fix. Companies need to move away from immediate gratification solutions and work toward finding ways to make employees happy without monetary incentives (because let’s face it, will it ever really be enough?). Why is money the best we can come up with? Work environment and solid leadership can make a world of a difference in motivating employees to perform their job to meet/exceed expectations.