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Incentives complexity

Avoid inflation of incentives if you wish to avoid running an organization of glass

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Incentives complexity

  1. 1. Incentives Complexity
  2. 2. Incentives may have a sweettopping; but underneath they may be deleterious
  3. 3. How?
  4. 4. Let us start on ourdiscovery journey
  5. 5. There is complexity in motivation and thiscomplexity warrants greater attention
  6. 6. The motivation to give incentives will work up to acertain range (optimal range). Say, somebody welcomesmonetary incentives. This is correct up to a limit, whenthe same person might seek different incentives such asmore work responsibility.
  7. 7. There is a switch over of preferences
  8. 8. A second point is the realization thatthere exists a feedback mechanism that might lead to non-linear results.
  9. 9. Giving more money to an employee will motivate him. This motivation increases hisproductivity and desirability to do more work,which in turn enhances his eligibility for more financial incentives
  10. 10. The Feedback Loop
  11. 11. These positive feedback interactions lead to surprising results that are non-linear
  12. 12. Imagine if same employees keep getting the majority of financial incentives
  13. 13. Big financial incentives create disparities These disparities weaken any system such as organizations
  14. 14. Eggshellswould be veryhard to break if they were thicker
  15. 15. Thick cementblocks are easy to break the moredisparity there is in their voids
  16. 16. Else, theorganization will become like…. Do not allow for disparity in your organization
  17. 17. ShuttersFragile Glass-Like Organizations
  18. 18. 1 more point
  19. 19. People futurerewards are basedon todays rewards
  20. 20. This may lead towidening the gaps within organizations
  21. 21. Beware of the inflation of incentives
  22. 22. Do not limit yourincentives to monetary ones; mix them with other incentives such as traveling

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