Do employee incentive programs produce measurable performance improvements?

Reviewing the budget for employee incentives and rewards and trying to determine whether or not the spend is justified.

As anecdotal support for the previous reply, we found that a process where people have time to work on their projects and see results they become really motivated. On our product management team, we let product managers shepard an idea from concept to requirements to development to release and finally to support.

To start to understand motivation you need to study motivation theory; like Maslow's hierarchy of need. Then apply those principles to the area of what you are trying to motivate. I have personally motivated productivity increase that also increase profits by over a million dollars a year. These increases in performance were created through monetary and non-monetary rewards. The levels of production were increased and stayed at high levels for over eight years until technology changed, and the process was ended. I believe those high levels of production would have been increased today. Incentive programs fail because management and process architects inadvertently motivate the incorrect behavior. The outcome is not a failure; the reward system is the failure. For instance, the car sales industry pays their people to sell cars, which the sales people do at almost any cost. I am theorizing if the salespeople were paid on how many times the customer returned then the experience would be different. The first HBR article is a magnificent treaty to the failure of improperly instituted management systems. The second article is an excellent walk through the facts that the correct environment will yield wonderful results. Motivation blossoms best in a world of ownership, responsibility and freedom.