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Aligning Incentives

January 13, 2022

Via: HR Hero

In a previous post, we discussed the importance of aligning employee incentives in order to optimize cooperation and collective action within an organization. Even the strongest leaders will struggle to achieve that cohesiveness if team members’ purpose doesn’t match. In this post, we discuss some strategies for tempering competing motivations and improving alignment.

Holistic Incentives

A classic example of misaligned incentives, and one we used in our previous post, is commission-based compensation for your sales team. When poorly implemented and managed, sales staff might be inadvertently incentivized to do just about anything to make a sale. This is true even if it puts tremendous strain on the production team, sacrifices long-term goals for short-term goals, or exposes the company to legal and regulatory risk.

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