The laws of incentives

The purpose of this post is to explain the effect of a good incentive system on the moral and productivity of the employees. We all know that human action is driven by incentives.

Incentives can be categorized into following four categories.

1. Moral: Moral incentive is little complex to understand.

A> Anything that make us feel proud, something which boasts our self respect , something exciting, something which give meaning to our lives that thing is moral incentive.

B> In spiritual terminology I define moral incentive is something which gratifies our intellect. Different people have different intellect. A evil person takes pleasure in doing evil if he succeeds in doing evil he is happy. A saint like person takes pleasure in doing good. Common person is just selfish he neither wants to do bad nor good. He just wants good for himself.

While rewarding people in terms of moral incentive we should keep in mind definition “A” and reward only good action not bad action.

2. Social: Everyone wants to be famous and acclaimed. If something gives us social praise we call it social incentive.

3. Economic: Money is important to everyone for survival.

4. Coercion: Fear of being fired or any type of political or social threat can be regarded as this incentive. The opposite of first three incentives can be regarded as coercion incentive. This is a negative incentive and it should not be used until very necessary.

A organization can use social and moral incentive in order to offset economic incentive.
We need to use various combination of these incentives in order to insure greater productivity of employees.

A vibrant workplace

The following are the preconditions, if they hold true the work place will be vibrant.

1. Employees should have feeling of being part of mission.


2. Two way open communication.


3. Harmony with supervisor, peers and juniors.


4. Organic growth of organization.


5. Work-life balance.


6. A friendly work environment.


7. Right pieces at right place ( elimination of job mismatch).


8. A balance between value driven leadership and goal driven leadership.


9. People should have feeling of security and trust rather than fear and uncertainty.


10. Good physical and mental health of the employees.
11. Keep it interesting.

According to HR surveys, salary comes at 8Th place in the list of the things that matters to employees. The leaders have a very big role to play in order to insure that the employees are engaged to their job.

Reward teams not individuals

The title says "reward teams not individuals". This theory is meant for fostering team sprite among employees because team builds projects not an individual.

This is a very common case that in order to execute a project efficiently and successfully the coordination between team mates is vital. Let us assume that inherently people are selfish, they believe in buck passing, leg pulling. We will solve these problems.

Let us go to the root of the problem. Right from our childhood we are rewarded for personal excellence hence we tend to be selfish. We always find incentive in being selfish. If we find incentive in being unselfish, helping team, helping project naturally we will start becoming unselfish.

To start with there should be provision for best team award rather than best employee award. Any situation can be rewarded where people have shown coordination and team sprite. Team sprite should be inculcated into people by their leaders. Bosses has a big role to play in this scenario. They should carefully watch the behavioral pattern of employee. This theory is the answer to the problem called "workplace rivalry".

Working hours and productivity

I would like to discuss what should be the ideal working hour for employees.
Let us try to find correlation between working hours and productivity of employees.
To start with, we can say productivity is directly proportionate to longevity of working hours.

This is not true because of following reasons:

1. Too much of work deteriorates people’s health.
2. Since they will spend more time in office, they will have little time for society and hobbies. These things will add to their frustration hence less zeal to live life.
3. They already know that they have to sit in office for long time, so they pull down the efficiency. They concentrate more on ticking clock rather than work.
4. Organization’s resources like Internet bandwidth, e-mail server, electricity are more likely to be abused.

It is known facts that European and American people work 40 to 50 hours a week and most of the technological innovation has been done by them. On the contrary Indians works 90 hours a week on an average.

I have experience of working in pure hostile production environment where profitability is directly proportionate to the line of code churned out by developer. The working hours were 10 AM to 10 PM. I tried to think that really those people are working 10 AM to 10 PM innocently and incessantly, including weekends. I have firm belief that had mastered the art of pretending to look busy and working hard.

Indian corporate has yet to get matured and learn professionalism.

I believe 70% of working days should not be more than 8 to 10 hours long. The focus should be on making people more efficient and motivated not pretenders.
I should mention that this holds true, only if organizations are looking for long term relation with people resulting in less volatile workforce.