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Pricing and Contract Intergration (Incentives associated with co

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Incentives can be either positive (rewards) or negative (damages or penalties). We have focused this week on incentives associated with cost; however, there are also schedule and performance incentives which can be applied instead or in combination with cost incentives. You will find two video clips to help illustrate this concept. One clip documents positive incentives (rewards) given to employees for performance by participating in healthy lifestyle activities; the other discusses an issue I am sure we have all encountered - airline schedule delays. Delays create a negative incentive (damage/penalty) for the airline such as paying for passengers to stay in a hotel overnight or, one which is hard to measure, shifting customer loyalty to a competitor.

Research and summariza what you located which highlights the use of positive or negative incentives (other than employee health care and airlines). Summarize your findings.

Health Care
http://www.youtube.com/watch?v=2UFxoK3aty4 (Links to an external site.)Links to an external site

Airline delays
http://www.youtube.com/watch?v=m2RWzok9Tig

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The response provides you a structured explanation of positive and negative incentives in organizations. It also gives you the relevant references.

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In compliance with BrainMass rules this is not a hand in ready assignment but is only guidance.

Positive incentives are widely used in business. Managers widely believe that positive incentives lead to better performance, and higher employee motivation. The motivator-hygiene factor theory of Fredrick Herzberg says that achievement, recognition, and advancement are important motivators. Positive incentives satisfy each of factors of motivation (1). Positive incentives include commission, bonuses, salary increments, awards, and promotions. For example, sales persons are given different types of positive incentives. Managers intuitively believe that positive incentives lead to higher sales performance. Other motivation theories also support positive incentives. Consider the Goal Setting Theory of motivation. It says that specific goals increase performance and difficult goals when accepted result in higher performance than easy goals. Managers ...

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Hatim Baxamusa, MBA
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  • BSc , University of Calcutta
  • MBA, Eastern Institute for Integrated Learning in Management
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