Meeting the Challenges of Pay-for-Performance Systems
Properly designed pay-for-performance systems present managers with an excellent opportunity to align employees’ interests with those of the organization. The following recommendations can help to enhance the success of performance programs and avoid the pitfalls we just discussed.
Develop a Complementary Relationship Between Extrinsic and Intrinsic Rewards
Recent psychological research suggest that hybrid intrinsic-extrinsic rewards may be effective motivators and that one type of reward may not necessarily compete with the other but rather they serve as complements to each other.25 For instance, “3M offers rewards that nourish both self-esteem and personal bank accounts while Google has ...
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