How incentive pay affects employee engagement, satisfaction, and trust

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Ogbonnaya, Chidiebere, Daniels, Kevin and Nielsen, Karina (2017) How incentive pay affects employee engagement, satisfaction, and trust. Harvard Business Review. ISSN 0017-8012

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Abstract

Most managers would agree that motivated, productive employees are crucial for organizational success, regardless of company size, industry, or corporate strategy. The question is how to motivate them. Offering employees performance-based incentive pay is one common approach, and it usually takes one of two forms: bonuses are offered to individuals based on assessments of their performance, or bonuses are offered as organization-wide incentives, such as profit-related pay or share ownership. Sometimes, these incentives work in ways managers intended them to. But there are ways in which these methods of performance pay can backfire, causing contentious behaviors among employees, complaints about unfair pay distribution, or overwork and stress. Although these critical issues represent real problems for many businesses, little progress has been made in gathering evidence on how different incentive pay schemes — performance-related pay, profit-related pay, and share ownership — might affect employee well-being.

Item Type: Article
Schools and Departments: School of Business, Management and Economics > Business and Management
Research Centres and Groups: Future of Work Hub
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Depositing User: Chidiebere Ogbonnaya
Date Deposited: 28 Aug 2018 12:42
Last Modified: 28 Aug 2018 12:58
URI: http://srodev.sussex.ac.uk/id/eprint/78311

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