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Introduction to performance incentives: ten reasons why incentives don’t work
Published on June 30, 2020 16 min
Other Talks in the Series: The Art and Practice of First Level Management
Introduction to performance incentives. I'm based at the Maastricht School of Management with teaching an MBA and this is a very important topic that we cover.
Now, many of you may think that performance incentives has something to do with the human resources department, that's a bit technical and a bit HR oriented. But actually every manager, every leader needs to understand the importance of setting incentives to get the best performance out of your team. Now, it's actually a much more complex subject than many people might think and this is actually just a basic introduction. What I want to talk about in particular are reasons why incentives can go wrong, because it's not that simple. Now, all these slides are based on my own personal experience of many years working in executive recruitment, in head hunting at quite a high level and people wanted to know what incentives were offered in any package. There were definitely things that worked and things that didn't work.
Basically, we're looking at sales staff. Sale staff are very easy to set incentives for because you can measure sales or the lack of in quite a simple way.
If your manager came in to your office and said to you, no salary increase this year, no bonus, no incentives, annual leave has been postponed, this is your whole way of operating in your company, this is your income, so how do you feel?
Incentives can produce some amazing results because people feel they are being rewarded for achieving something which is for the benefit of the company. If you want to increase sales, you reward the people who are doing that,