72.         Providing employee incentives can be a double-edged sword. On the one hand. the
promise of bonuses or gifts can spur workers to higher achievement. On the other hand,
incentives can create resentment and internal competitiveness that are damaging to
morale and to the organization. Even so, I think a carefully designed incentive program
can operate to the net benefit a company.
      Incentive programs are counterproductive when the distribution of rewards
appears to be personally biased, when the program recognizes just one kind among
many important jobs in the organization, or when there are too few rewards available.
For example, if a manager regularly rewards an employee who is perceived to be a
favorite, coworkers will be resentful. Or if the company decides to recognize high sales,
while ignoring an especially precise cost-assessment from the accounting department,
the accountants may feel their work is not valued. Finally, if rewards are too few, some
employees will become overly competitive, while others may simply stop trying.
      However, incentive programs can be designed to avoid such pitfalls. First, the
company must determine that it can provide sufficient rewards to motivate all
employees. Then it must set, and follow, clear and non-arbitrary guidelines for
achievement. Finally, management should provide appropriate incentives throughout the
organization, thereby sending the message that all work is valued. Admittedly, even a
thoughtfully designed incentive program cannot entirely prevent back-stabbing and
unfair competitive tactics. But watchful management can quell much of this behavior,
and the perpetrators usually show their true colors in time.
      In sum, I think that the productivity inspired by thoughtful incentive programs
will very likely outweigh any negative consequences. In the final analysis, then, I
disagree with the speaker's recommendation against their use.