W. Edwards Deming, often referred to as the
leading quality guru in the United States, and psychologist Alfie Kohn support
the idea that incentive pay is not a motivator for individuals to do a good
job. Yet economists argue that incentive compensation does work and as
economist George Baker notes in his 1993 article in the Harvard Business Review
titled “Rethinking Rewards,” “The problem is not that incentives can’t work but that
they work too well.” What does Baker mean? Discuss the importance of a
well-developed compensation plan in attracting and retaining good employees and
how to keep those plans from “working too well.”
https://hbr.org/1993/11/rethinking-rewards
Brickley, J., Smith, C., &
Zimmerman J. (2021). Managerial Economics
and Organizational Architecture (7th ed.). McGraw Hill;