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    Why Pay Incentives Work

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    You are a supervisor in a company that is a low payer relative to your competitors. What are some things that you can do to increase the likelihood that workers will feel fairly treated? Do you feel that doing these things will improve the manner in which the workers treat internal and external customers? Why or why not?

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    Workers who believe they are treated unfairly, for any reason, are less likely to put forth the
    effort required to support a highly performing organization. One method for improving performance,
    attitude, and overall productivity, is to initiate a pay for performance pay raise system. The issue is
    whether employees believe they are being paid fairly for the work they do, relative to other roles or to
    similar jobs in other companies (Wharton School of the University of Pennsylvania, 2013). Poorly paid
    workers are likely to look for openings in firms that pay more for the same work, when possible. If this
    is not possible, they may find other types of work that pay better, assuming they believe they can
    change roles. Either of these situations can lead to poor productivity, poor sales and customer service,
    and high turnover.
    Turnover and poor customer service are both costly to the organization. Turnover is costly ...

    Solution Summary

    The discussion focuses on pay for performance, as a solution for improving job satisfaction among workers in a company paying less than competitors.