How Companies Motivate Employees Through Different Incentives Research Paper

How Companies Motivate Employees Through Different Incentives - Research Paper Example AUDIENCE: The audience for this report is any business owner or manager who is looking to motivate their employees to be more creative or more productive. I. Opening Brain drain and employee apathy are two large obstacles to optimum productivity. This becomes an inevitable part of any corporate lifestyle due to the process of completing mundane activities. In order to combat this within employees, companies regularly provide incentivized programs to invigorate productivity within employers. Various subjects that are key to increasing productivity include but are not limited to bonuses, benefits, increased commission, and even the environment (Sheffrin, 2003). Companies regularly promote competition between employees as a means of increasing productivity as well. In fact, there are a myriad of methods that have and can be used as a means of promoting productivity. A. Compensation, bonuses, benefits and their role in motivation employees Over the past decade, companies are demanding mo re productivity from the workers while compensation is down. This is because of the ever popular law of supply and demand. Indeed, when the job market is low, there is a higher demand for those positions. This means that companies can pay less for the positions available. Since economists consider productivity (i.e., output per hour worked) to be a key economic determinant of living standards, this fast pace would normally have positive implications for the working class.  But in reality, the opposite is true because of the bottomed out economy. Benefits also play a vital role in the productivity of workers because that is a value added dimension of healthcare programs (Bandura, 1997). Insofar as higher benefit costs are perpetuated by the escalating cost of health care, the increased dollars being spent on employee benefits do not lead to improved benefits.   Moreover, companies are mandated to make greater contributions into specific benefit pension plans than they did during the stock market boom. Though this may translate into higher compensation costs, it by no means improve living standards and conditions for workers (Sheffrin, 2003). Beyond that point, for the individuals who do not receive benefits from their employers, the estimated total compensation is lagging further behind productivity. The internal link for the lack of compensation growth is due to the lack of jobs available in the market as described earlier.   Employment is still down by approximately 1.2 million jobs since the recession began, which has resulted in many workers lacking the bargaining power to claim their fair and due share of the growing economy (Sheffrin, 2003). As a consequence, most of the benefits of growth have flowed to profits, not compensation.  This is because upper level management is still forced to focus on the bottom line for the shareholders, as opposed to the welfare of the employees. In the modern economic climate, the belief that productivity growth wi ll translate into rising living standards across the income spectrum is losing credibility (Bandura, 1997). II. Body A. History of Corporate Incentive Design In terms of Corporate Incentive design, the application of proper motivational techniques can be a daunting and difficult task. When companies attempt to develop a reward system, it can be easy to reward A, while intending to motivate figure B, but unintentionally reap harmful effects that can pose a liability to corporate objectives. Incentive theory in essence means that a person's actions