What practical implications do managers have
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What practical implications do managers have?
Introduction
In this day and age, we have moved beyond the classics focus of the tradeoff between insurance and incentives. Where if you were fully insured you would have no incentive to work and if not you would have the incentive to work hard.
In researching for the absolute answer for this question, I have found that the answers change depending on the circumstances we are faced with.
Defining the debate
In this question I am asked to distinguish between economic versus the social psychological, extrinsic versus the intrinsic and find practical ways for the manager to implement synergies and better work practices.
Economic-Extrinsic motivations are factors used to reward employees that are tangible and easily measured such as money, stock options and shares.
The advantages are that they are easy to quantify and implement. An example is the auto-windshields installation where piece rates provided stronger incentives as the job was narrowly defined and easily monitored
The disadvantages are that they are usually only good for the short-run as it is not sustainable and at times too much extrinsic motivation will hamper intrinsic motivations and overall performance. Some examples are in Heinz where managers received a bonus only if earnings increased year after year. This caused managers to manipulate shipments and payments...