Question

Which of the following is not a recommended guideline for designing and administering a compensation and reward system that will truly motivate organization members, inspire their best efforts, and sustain high levels of productivity?
A. Make the performance payoff a major, not minor, piece of the total compensation package
B. Keep the time between achieving the target performance outcome and the payment of the reward as short as possible
C. Maintain a 50-50 balance between monetary and non-monetary rewards and a 50-50 balance between positive and negative incentives
D. Make sure that the performance targets that each individual or team is expected to achieve involve outcomes that the individual or team can personally affect
E. Absolutely avoid skirting the system to find ways to reward effort rather than results

Answer 1

Answer: C. Maintain a 50-50 balance between monetary and non-monetary rewards and a 50-50 balance between positive and negative incentives.

Explanation:

Employees generally prefer to be paid for their hardwork and so would prefer that their rewards are more monetary in nature than not. As good as non-monetary rewards are, they should not be on equal footing with monetary rewards. If they are, it could demotivate employees who will feel they are not getting paid their fair share.

Negative incentives get the job done but more often than not fail to positively motivate employees in such a way that they will bring out their best efforts. Negative incentives are more like punishments or the threat of them and so if they are on equal footing with positive investments, organization members will not be as motivated.