In this time of increasing uncertainty about business viability and stability, many organizations are looking to gain control of their "bottom line" by strengthening the link between organizational outcomes and employee rewards. Long gone are the days of steadily and automatically increasing worker salaries as a hoped-for method of expanding productivity. Indeed, there is a school of thought that suggests that automatic pay increases act as a "demotivator" for many individuals. The more common approach currently is to utilize incentives (i.e., additional compensation/rewards given for performance beyond normal expectations) as a way of enhancing employee work motivation, thereby leading to increases in organizational performance. These incentives can be either short-term in nature (e.g., paying a certain rate per unit produced) or take more of a long-term perspective (for instance, profit sharing programs). In and of themselves, such compensation practices seem to be sound business practices. However, there is a distinct possibility that taking a blanket approach to implementing incentive programs, i.e., not taking individual differences between employees into account, may result in an unintentional "slotting" of certain ethnic and racial groups into career paths that will be detrimental to their long-term financial and employment health. The remainder of this essay sets forth the theoretical underpinnings for that conclusion.
Jones, James R., "Why Can't We Wait (To Spend) and the Law of Unintended Consequences: Potential Negative Impact on Minority Employees from Well-Intentioned Organizational Compensation Practices" (2001). Marketing and Management Faculty Proceedings & Presentations. 2.
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