Incentives and Organizational Goals, Essay Example

With globalization, many organizations today are facing increasing competition from similar firms in the global market. The need for unique strategies of operation is therefore imperative for any organization to achieve its objectives. Incentives is one of the strategies that companies are using today for them to achieve their objectives. With this there has been established relationship between incentives and organizational goals. Like any other strategy used by organizations to increase chances of attaining organizational goals, use of incentives has different outcomes depending on the strategy used by organization. Many companies today are increasingly using incentives with different outcomes on their attainment of organizational goals. Coca-Cola Company is a good example of company using incentives in the aim of attaining organizational goals.

Meloy, Russo and Miller (2006), define incentive as any factor which is aimed at improving the motivation of taking a particular course of action. In cases where there are alternatives, incentives are aimed at coercing the chooser to taking a particular course of action instead of the other. It should be noted that incentives may or may not be financial in nature. Incentives in the above definition can said to be any activity that is aimed at influencing natural course of action. Given the above definition, it is highly likely that incentives have a very big impact in the performance of an organization. It should also be noted that there are different types of incentives which work differently towards the achievement of organizational goals.

Coca cola Company has been using incentives for a long time to achieve their organizational success through improving sales or motivating their employees to work better. The natures of incentives that are issued by the Bottling Company include, gift vouchers, tickets to sporting events. All these incentives were applied in all the branches operated by the company. These incentives cost a lot of money given the scale that the incentives are applied and also the number of employees that the company has.

In assessing the performance of the incentives in relation to the planned outcomes, Chris Ceravalo, the senior manager in charge of compensation and performance management of the Charlotte, N.C.Coca cola Bottling Company branch asserts that the company is not even aware of the amount of money that it has spend on the incentives on its employees but there were signs that the employees were getting used to the incentives to the point that they even expected incentives for them to do what is expected of them. Base on such views the importance of incentives in increasing employee performance can be said to be ineffective. The Charlotte Coca Cola bottling company branch according to Palmer (2008) the company planned to use 100,000 dollars per year but clear assessment of the total spending of the company on the incentives indicated that more than 200,000 dollars is spend annually on incentives. With the rising cost of implementing incentive plans, heavy use of incentives can greatly reduce the profits of an organization. If taken from the example of the coca cola Charlotte Branch, the cost of running incentive programs can be very unpredictable and may increase anytime if not properly formally managed.

Although the cost of the programs may be very expensive and may reduce organizational profits, incentives work to improve performance of employees. An incentive program started by the Charlotte Coca Cola Bottling Branch where employees were given Visa gift Cards when recommended by their seniors for good performance had a lot of impact on the performance of employees in the company. The program was aimed at improving employees in several aspects of the company such as customer satisfaction, sales, safety of employees, training and overall wellness of employees in the organization.

After formal implementation of the program with proper management, there were several aspects of the employee behavior that were seen to improve six months after the program was implemented. For example the employee wellness was improved which translated to improved performance of employees especially on delivery truck drivers who were always overweight. Such programs were found to improve sales and customer satisfaction.

From the above examples it can be seen that incentives can work into improving a company performance. Depending on the way the program is introduced and managed performance of employees in a company can be improved through incentives.

References

Meloy, M.G., Russo, J.E. & Miller, E.G. (2006). Monetary Incentives.  Mood Journal of Marketing Research (JMR). 43(2): 267-275, 9p.

Palmer, A. (2008). The Sweet Taste of Success. Incentive, 182(9).