IncentivePosted: September 22, 2003
I definitely don’t agree with the way the Industry is headed as far as offering incentives to top performers go. The trend begins with Microsoft, who recently switched over from stock options to something more toned down and less attractive. For them, this move might have made sense, but to the employed worker, this is definitely a loss.
As a young kid, I wasn’t ashamed to put in that extra 10% for some cool incentive. The incentive never assumed more importance than the task itself, but it did push the stakes up that much higher. My mom proudly states that my Grandad was one of the first traders in the busy commercial laxmi road to introduce commisions to employees proportional to their sales. That was an early incentive which caught on in terms of popularity with all the other traders. For the employee, this meant instant rewards after some real hard-selling and it works even today.
In the Industrial revolution and later the technological revolution, 100% employee owned companies are rare but ever present. What is more popular, is to give a direct share of the company to the employee. This introduced two factors I consider important, accountability of the employee to the company in terms of his work ethic and reverse accountability of the company to the employee in terms of its management.
Somewhere down the road, this did help the rich get richer (Bill Gates is worth so many billions now) but more than anything, it gave the employee the very achievable dream of getting rich when his hard work paid off and not this is not just an option to indemnify yourself when your old, I mean retire at 40.
The kind of incentive everybody hates is the one where you take from Ram and give to Shyam, I have seen that happen in my career, I did not like it and no I was not on the wrong end of the stick. I have also experienced the better and more fair incentive. It gave me confidence in my abilities and pride in my work.
You cannot deny it, in its harder form, necessity IS the mother of invention. While incentive may not be so strong in intensity it certainly is ingrained in Human Nature.