Friday, July 6, 2018

Labour & Pop Culture: Incentive Pay at the Office

This week's instalment of Labour & Pop Culture looks at incentive-pay systems as portrayed on the television show The Office. I'm currently revising AU's introductory human resource management course and incentive pay is one of the topics we touch on.

The basic idea, as noted by one of the workers in the sketch, is that the employer wants more production out of the workers without paying them more. So manager Andy sets up a points system whereby workers can win low-value prizes for achieving performance targets.

Incentive-based pay sounds like a good idea, but it is fraught with peril for employers because designing an effective system is tricky. Set rewards too low and they have no effect. Set rewards too high and they can drive all sorts of perverse behaviour, such as increasing quantity at the expense of quality.

The Office does a nice job of noting that the interests of workers and employers conflict in such systems and that workers can, if they work collectively, subvert these systems. This is a good lesson for wannbe managers.

-- Bob Barnetson

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