BUS576-2

Individual Assignment 2

            The first concept that I learned this week was from chapter 5 and how money is not always the best incentive to motivate employees.  In the example about the garbage workers whose work quality actually decreased when offered the financial incentive.  They started to find any way to get done with their routes faster so they did not have to work their full eight hours that they actually broke some of the rules.  Their quality of work declined as a result of the financial incentives.  Employers who offer stock options as incentives have to be aware that they might increase unethical behavior.  If an employee is rewarded with stock they may revert to unethical ways of keeping the stock price up.  Financial incentives are much more complex than I would have thought for management to consider implementing.  They really have to know what they what to achieve through the incentives and identify any negative effects that may occur from the incentives.  The only concern I had was how the book mentioned that employees can become jealous of one another if one employee receives financial incentives over others.  My concern here is how would employees know what the other employees make to know they are receiving these incentives? 

                                             

Another concept that I found interesting and thoughtful was Dan Gilbert’s “Why we make bad decisions” video.  I thought it was very informational about how people can go about making a bad decision.  When he explains what influences our decisions and then compared them to evidence, for instances odds of winning the lottery, it shows just how foolish some of our decisions can be.  I thought it really opened my eyes to perhaps seek evidence and focus on that before making a decision.  Not only is this a smart concept for everyday life, but it can also be translated into the business world.  If management would put the time and effort into research and gathering enough data to support their decisions than they may be less likely to make bad ones.  I enjoyed this video and I thought it was very powerful and informational concept.

            I read the article, Takethe Boss and the Egos Out of the Salary Equation, by Jurgen Appelo from the Entrepreneur website.  The article was about how to compensate employees based on their performance and their expected performance.  The author states that fairness is an important factor in deciding individuals’ compensation.  He also discusses four elements that he finds important to staying fair in compensations.  One point that he made that was also discussed in Chapter 5 of our textbook was that people often believe their own performances are above average.  For the most part, there was no discussion as any evidence-based facts in his article.  I interpreted this article to be based mostly on the author’s opinion rather than on research and evidence.

            This week’s readings and videos were informational and helpful for not only management decisions, but also with personal decisions.  It made me more aware of the impact that the decisions we make can have on our lives are careers.  I was surprised to find how difficult it can be to implement financial incentives and the ramifications that can result from them.