It's true that employees like to be acknowledged and rewarded for doing their jobs well. However, not all personnel appreciate the same kinds of incentive compensation. Using a single compensation method, such as bonus pay or wellness benefits, may short-change staff members who do not desire these kinds of rewards. Either by robbing companies of better employee output or discouraging talent retention, companies need to be sure that they aren't cheating themselves out of best possible outcomes by offering too rigid an incentive compensation solution.
Impact of incentivization
The Bowdoin Orient stated that student staff at Bowdoin College in Brunswick, Maine began offering nominal paychecks to all tour guides operating on-campus through the Student Employment division. Adding payment to the program hasn't changed the priorities of employees, though, according to current workers. It has however made the department acknowledge that it has too many student tour guides, a condition that had not come up previously. It's possible that the addition of mandatory pay and incentive compensation could therefore represent a negative impact on how the student agency is run.
"I think people become tour guides because they love Bowdoin and they want to share how much they love Bowdoin during that hour long tour they have," said Co-Head tour guide Andrew Klegman to the source. He added that the infrequency with which tours are given by individual students amounts to minimal pay at best, since only one or two guide sessions are delivered per person each pay period.
Identifying areas for improvement
"At a minimum, the [HR leader]'s team should be involved in running payout calculations and performance curves against various assumptions about the company's performance," Juan Pablo Gonzalez of Axiom Consulting told CFO. "But the greater value is in having the [leader] look behind the numbers to assess whether bonuses are really driving the behavior that supports company strategy."
This highlights the issue of HR management versus payment. CFO Online pointed out that financial indicators can help organizations determine the fitness of certain programs, as in the case of reducing workforce for the tour group once it was seen that too many personnel were on staff. These kinds of cuts can help the entity run more efficiently, but it may also harm engagement of remaining staff or could reduce the public image of the organization due to the reduction in employees.