Motivating managers with money

Does money motivate managers? Many current compensation programs are merely annual bonuses or profit-sharing plans. Seldom is an executive rewarded for actual improvement in performance. The author looks at the situation from two angles: salary administration and incentive bonus administration. Firs...

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Bibliographic Details
Published in:Business horizons 1973-04, Vol.16 (2), p.37-43
Main Author: Wilson, Sidney R.
Format: Article
Language:English
Subjects:
Bonuses
Executive compensation
Incentives
Managers
Motivation
Wages & salaries
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Summary:Does money motivate managers? Many current compensation programs are merely annual bonuses or profit-sharing plans. Seldom is an executive rewarded for actual improvement in performance. The author looks at the situation from two angles: salary administration and incentive bonus administration. First, there must be equality between salary earned and salary received. Second, a company has to establish criteria for evaluating an employee's earned income. The author suggests that an employee's evaluation be based on his observable daily performance, rather than on vague concepts such as his willingness to cooperate or his loyalty to the firm. When a company does award bonuses it should give them for performance that exceeds the daily criteria, and it should pay the bonus immediately.
ISSN:0007-6813
1873-6068
DOI:10.1016/S0007-6813(73)80007-2