Incentives are one of the most common weapons used to motivate employees these days. This is not only useful for businesses but also for the implementation of our own plan. For example, when your parents say that you would get a laptop if you top in your exams, your parents are motivating you with the laptop, so that you take up your exams seriously and earn the top scores. Your ‘laptop’ is the incentive that acts as a motivator for you to achieve something that your parents want from you. The same thing happens in businesses: employees are given the incentive, either financial or non-financial, to reach a particular target or to work efficiently, improving their performance level.

The common goal for creating incentives plans is that to motivate an individual or a particular group to push their boundaries to get the reward. But, does this plan work always? Research shows that these plans work only when it is fair and meet the appropriate need for the particular group. An incentive plan is fair only when it is achievable, and the group who is to be rewarded has to trust themselves that they can achieve that goal. For example, if a group of factory workers is given the incentive of $100 as a bonus each, if they produce 3500 output per day; and even if the workers work with full efficiency they can produce 3000 products maximum as per this is maximum what the machinery can produce. Such plans are not achievable and workers will be demoralized with such plans. As for meeting the perfect need is necessary as the willingness to get the reward motivate the employees. If the top five high performing factory workers are to be rewarded at the end of the month with some bonus, they will be happy as money is their need. However, they were to be rewarded with trophies and that would probably not be the ideal choice to motivate factory workers, as they won’t value trophies like money.

Incentive plans fail because it lacks to identify what people need and act accordingly. However, the willingness to act to the incentive comes from the individual or the group itself. So, the reason of such failure depends from person to person.

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