The incentive

These are times when we often hear about corporate scandals, greedy founders and C level corruption. Guess this is what caused this piece.

From time immemorial incentive techniques have been applied on all living creation. Parents offer the extra goodies to kids not wanting the unpalatable stuff, corporations offer extra monetary benefits for higher sales, animals trained and prodded to behave by morsel offers on every step taken etc. What does incentive really do? And why do we need them in the first place? Classic definition calls incentive a reward for the extra bit performance. With time things change. In the present day context, I guess we are put on incentives through hidden processes too. I call it hidden ‘cause, we do not necessarily use the products or services in lure of incentives. The airlines frequent flyer program’s, cell phone companies encourages us to talk more through innovative schemes, extra sleaze content through cable network encourages viewers towards extra airtime usage, buy one and get another pack free! And there is the routinely more overt and institutionalized forms. There are prizes for class toppers, and additional thousands for super sales achievers. Which leads me to wonder which part of our life is free from incentive? Religion? I guess not. All religious formats tempt practitioners using the fruit or the better life or the peace theory. This is not casting an aspersion in anyway or doubting their intent, but the continuous mushrooming of alternative practices to an extent suggests that these are also the days of instant gratification and there is a price which one is willing to pay for heaven. Now where does this lead to? An old Indian saying goes 'An excess of anything causes the opposite of the desired effect'. Incentives I guess keeps switch gears more often, step up the tempo. And as the pace increases compromises with one own value systems and processes is bound to happen. The lure to go after the forbidden fruit offered as an incentive still tempted Adam. Wisdom will get blurred. The Chicago public school data analyzed and wonderfully put forth by Levitt proves that the gurus too succumb to pressures of incentives! Today there is hardly an organization worth its repute not come across white collar crimes in its premises. To circumvent the ‘right’ practices in many cases, these crimes are also committed in a collaborative mode, which includes parties within and outside from whom product or services are purchased. In turn figures have been forged, quality of products compromised and vouched for. How much has incentives caused this effect is debatable. But it could be one amongst the influencing factors. Now there are theories which defend incentives. If there is no incentive, where do performers go? And in an undifferentiated world when excellence does not get rewarded, stagnation sets in. This speak is from the corporation standpoint. Extending this logic further, we could probably touch upon the origins of a company and perhaps touch the roots of capitalism itself! But I guess this will be separate conversation. No doubt that the internal pressure one puts on oneself due to incentive in an organizational environment is significant.

Perhaps it is time for companies for rediscover the mission of their existence. It may sound too altruistic to imbibe the spirit of those statements in every action undertaken by the employee on behalf of the company. But why not create reward scheme which gives the social objectives a degree of importance? ‘Be leader in infrastructural projects’, or a ‘number # 1 detergent brand’ to ‘leading truck manufacturer’ or ‘be a world class IT services provider’ can be trickled down to a socially relevant and yet individual cause for employees and partners to take up or strive for. This thought needs further exploration.