Do you have your own business and think that offering your employees and managers financial incentives to boost sales and employee morale this year is a good idea? Think again. Recent research and studies are finding that offering financial incentives is more likely to lead to unethical behavior in the workplace, and can also create a hostile work environment.

Offering compensation for meeting higher sales goals can create unethical behavior and dishonesty in both managers and their employees. Employees are more likely to lie or fake financial reports and information to show better sales, or to deceive customers and coworkers to get bonuses. Besides the problem of unethical behavior, financial incentives and bonuses for hitting sales goals can also create pay inequality issues. Once there are issues with pay inequality, you’ll begin to see greater rates of turnover.

Most people consider if their pay is fair or not bases on what their co-workers are earning, not based on the amount or quality of their own work and how well it meets job expectations. So then, when other employees start getting paid more just for higher sales but maybe not for any more work, an employee may feel undercompensated and seek new employment. Employees will grow resentful and jealous of each other as well, which creates a hostile work environment for both the employees succeeding and the ones not meeting goals that earn incentives.

Consider emphasizing free time, play, potential for growth, and employees having a purpose at work to increase motivation among employees. Give promotions based on performance more than sales, and focus on giving employees the chance to learn new skills and make decisions in the workplace to gain experience that is beneficial for their future. Not all work benefits should be financial, so start thinking about other ways to make employees feel valued and fulfilled at work so that they are motivated to do better work, which in the long run might have a greater impact on your business’ sales. Interested and looking for more information? Give us a call today.