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Bonuses can Backfire

Accordingly, case notes will be collected. case notes should include , answers to the questions at the end of the case, and annotations or additional issues you think are pertinent. These analyses should be approximately 1-2 typed pages.

Bonuses can Backfire

It might seem obvious that people will be motivated by
bonuses, but many scholars question this premise. Alfie
Kohn has long suggested that workers are “punished by
rewards” and urges that organizations avoid tying rewards
to performance because of the negative consequences
that can result. As an alternative to rewards, some experts
recommend that managers foster a positive, upbeat work
environment in hopes that enthusiasm will translate into
motivation.
Although rewards can be motivating, they can reduce
employees’ intrinsic interest in the tasks they are doing.
Along these lines, Mark Lepper of Stanford University
found that children rewarded for drawing with felt-tip
pens no longer wished to use the pens at all when rewards
were removed, whereas children who were not rewarded
for using the pens were eager to use them. Similar experiments
in which children completed puzzles have also
shown that increasing rewards can decrease interest in the
rewarded task. Some have questioned the extent to which
these results generalize to working adults, but concern
about rewards diminishing intrinsic motivation persists.
Rewards can also lead to misbehavior by workers.
Psychologist Edward Deci notes, “Once you start making
people’s rewards dependent on outcomes rather than behaviors,
the evidence is people will take the shortest route
to those outcomes.” Consider factory workers paid purely
based on the number of units they produce. Because
only quantity is rewarded, workers may neglect quality.
Executives rewarded strictly on the basis of quarterly
stock price will tend to ignore the long-term profitability
and survival of the firm; they might even engage in illegal
or unethical behavior to increase their compensation.
A review of research on pay-for-performance in medicine
found that doctors who were rewarded for treatment outcomes
were reluctant to take on the most serious cases,
where success was less likely.
Although there might be some problems with providing
incentives, the great majority of research cited in this and
the previous chapter shows that individuals given rewards
for behavior will be more likely to engage in the rewarded
behaviors. It is also unlikely that individuals engaged in
very boring, repetitive tasks will lose their intrinsic motivation
if the task is rewarded, because they never had any
intrinsic motivation to begin with. The real issue for managers
is finding an appropriate way to reward behaviors so
desired behavior is increased while less-desired behavior is
reduced.
QUESTIONS
1. Do you think that, as a manager, you would use
bonuses regularly? Why or why not?
2. Can you think of a time in your own life when being
evaluated and rewarded on a specific goal lead you to
engage in negative or unproductive behavior?
3. Do you think providing group bonuses instead of
individual bonuses would be more effective or less
effective? Why or why not?
4. How would you design a bonus/reward program to
avoid the problems mentioned in this case?

Bonuses can Backfire

Accordingly, case notes will be collected. case notes should include , answers to the questions at the end of the case, and annotations or additional issues you think are pertinent. These analyses should be approximately 1-2 typed pages.

Bonuses can Backfire

It might seem obvious that people will be motivated by
bonuses, but many scholars question this premise. Alfie
Kohn has long suggested that workers are “punished by
rewards” and urges that organizations avoid tying rewards
to performance because of the negative consequences
that can result. As an alternative to rewards, some experts
recommend that managers foster a positive, upbeat work
environment in hopes that enthusiasm will translate into
motivation.
Although rewards can be motivating, they can reduce
employees’ intrinsic interest in the tasks they are doing.
Along these lines, Mark Lepper of Stanford University
found that children rewarded for drawing with felt-tip
pens no longer wished to use the pens at all when rewards
were removed, whereas children who were not rewarded
for using the pens were eager to use them. Similar experiments
in which children completed puzzles have also
shown that increasing rewards can decrease interest in the
rewarded task. Some have questioned the extent to which
these results generalize to working adults, but concern
about rewards diminishing intrinsic motivation persists.
Rewards can also lead to misbehavior by workers.

Psychologist Edward Deci notes, “Once you start making
people’s rewards dependent on outcomes rather than behaviors,
the evidence is people will take the shortest route
to those outcomes.” Consider factory workers paid purely
based on the number of units they produce. Because
only quantity is rewarded, workers may neglect quality.
Executives rewarded strictly on the basis of quarterly
stock price will tend to ignore the long-term profitability
and survival of the firm; they might even engage in illegal
or unethical behavior to increase their compensation.
A review of research on pay-for-performance in medicine
found that doctors who were rewarded for treatment outcomes
were reluctant to take on the most serious cases,
where success was less likely.
Although there might be some problems with providing
incentives, the great majority of research cited in this and
the previous chapter shows that individuals given rewards
for behavior will be more likely to engage in the rewarded
behaviors. It is also unlikely that individuals engaged in
very boring, repetitive tasks will lose their intrinsic motivation
if the task is rewarded, because they never had any
intrinsic motivation to begin with. The real issue for managers
is finding an appropriate way to reward behaviors so
desired behavior is increased while less-desired behavior is
reduced.
QUESTIONS
1. Do you think that, as a manager, you would use
bonuses regularly? Why or why not?
2. Can you think of a time in your own life when being
evaluated and rewarded on a specific goal lead you to
engage in negative or unproductive behavior?
3. Do you think providing group bonuses instead of
individual bonuses would be more effective or less
effective? Why or why not?
4. How would you design a bonus/reward program to
avoid the problems mentioned in this case?

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