When you're looking to incentivise your employees, a target and reward structure is a popular choice for many employers, however, now researchers say that these systems can also lead to 'increased dishonesty' in the workplace.
According to Human Resources Online, a study in the US has called into question whether incentive schemes need to be brought into the workplace alongside a way to check their impact on employee behaviour. Creating simulations with business school students, the study introduced four systems – a combinations of specific goal versus no specific goal, as well as a flat wage contract versus a incentive contract.
The study discovered a correlation between having an incentivised wage when using a specific target and dishonest practices in the workplace, whereas dishonesty decreased for those managers on a flat wage.
The research concluded that: “In an opaque environment where managers have private information, organisations using goals need to consider not only how adding an incentive pay structure may lead to increased effort but also how it might lead to increased dishonesty.”
Interestingly, the study also found that presence of a 'slippery step' in dishonesty when reaching to meet incentivised goals. This is where dishonesty was likely to become exponentially worse once managers had cleared a certain level of dishonest practices, while smaller departures were less likely to indicate larger dishonesty in the future.
So, while fixed goals clearly motivated employees in these simulations, in a competitive business landscape, keeping an eye on the effects of targets and incentives on an employees behaviour is critical.
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