Why your startup team needs more than basic financial incentives to thrive

"Commonwealth Bank shareholders’ rejection of a move to base CEO pay on “soft targets” rather than financial goals, is just the latest example of how corporate Australia places too much confidence on the use of these types of targets. Financial goals are seen as more objective, transparent and “hard”, thus avoiding easy performance hurdles. But, research shows financial incentives can have a negative impact on employee emotions and fear can destroy a business. The use of incentives schemes to pay for performance is common. From CEOs to frontline staff, investors generally believed that setting challenging goals, with commensurate rewards, creates strong motivation and leads to higher productivity. But while incentive structures are commonplace, their emotion impact is less well understood." Read more

The Conversation StartupSmart 15 Nov 2016