Friday, February 7, 2014

Incentive Schemes In Human Resources - A study by Artur Victoria

Incentive schemes are sometimes constructed in which rewards to the individual depend on achieving certain hurdle levels of performance. That is, compensation depends discontinuous on the achievement of some numerical goal. For example, a salesman bonus may depend on whether he surpasses some level of sales, and/or his average commission percentage may jump discontinuous as certain sales figures are exceeded. When effort is spread over time, such schemes can fail to achieve the desired ends. For example, a worker whose performance near the end of the evaluation period is far from the next hurdle will have little incentive to work hard. In contrast, employees who are close to a hurdle will have strong reasons to want to kill themselves (or others!) trying to make it, even at the cost of hurting performance in the future or undertaking dysfunctional actions, such as bilking a valued customer in order to make a quick sale. The salesperson far from the next hurdle may "bank" sales for the next period, while the salesperson close to the next hurdle may try to accelerate sales.

This can be particularly true of comparative schemes, where a prize is given, say, to the best cumulative performer over some period out of a set of employees. In such cases, if one employee builds up a substantial lead over the others, then all may decrease their efforts; those who are behind slow down because there is little chance that they can catch up, and the leader slacks off because those behind have slowed down. In general, the worker's ability to shift the level and nature of effort as time passes makes schemes that evaluate performance over a period of time somewhat tricky. leia todo o artigo