Re: Reward Systems

From: John Conover <>
Subject: Re: Reward Systems
Date: Mon, 29 Jan 1996 01:45:22 -0800 writes:
> Eric Liszt asks of me:
> >What type of reward systems have you seen that actually
> >serve the purpose they were designed for?
> None.  Having answered the question directly, allow me to
> elaborate.
> Point #3:  Because they are complicated, often elaborate,
> reward systems are susceptible to manipulation; indeed, they
> invite it.  Moreover, owing to their complicated nature, successful
> manipulation of reward (and other control) systems often goes
> undetected.

Several years ago, the MIT Prof. of Mgmt. Theoreou(sp?), cited the
study at Western Electric, (several decades ago,) where a scheme was
devised to measure what incentives worked best in the assembly line
environment. They divided a stable, mature, (telecommunications
product line, if I remember correctly,) assembly line in half, one
half being the control group, the other was offered various
incentives; they were offered salary incentives, and productivity
increased, then offered free coffee and more breaks, (if I remember
correctly,) and productivity increased. This goes on for a while, and
with every incentive, productivity increased. Then someone observed
that the productivity of the control group was also increasing. So, as
a test, they removed all of the incentives given to the second
group-and, you guessed it, productivity increased in both groups, yet
again. BTW, if I remember the context of the presentation, it was that
managers should consider the different management techniques
(incentives, MBO, etc.,) as a "tool box," where the right combinations
of tools are used on the right problem.


BTW, after they removed all of the incentives and productivity
increased, they asked the employees why all of this stuff increased
productivity. The answer given was that if the company was allocating
so much in resources watching and monitoring the assembly line, then
their work must be very important, so they had to give their
best. IMHO, it was, inadvertently, probably the first research done on
"walk around management," And, BTW, it is called the Hawthorne Effect.



John Conover,,

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