PAYMENT SYSTEMS IN IMPROVING MOTIVATION AND PERFORMANCE

Payment Systems in Improving Motivation and Performance

Payment Systems in Improving Motivation and Performance

Introduction

The purpose of this research report is to make an analysis on how the payment system can be used to improve the motivation and performance of employees in British Airways. Despite the increased popularity of contracting-out of health services in developing countries, its effectiveness on overall health system performance is not yet conclusive. Except for substantial evidence of contracting-out's positive effect on access to health services and some evidence on improved equity in access, there is little evidence of contracting-out's impact on quality and efficiency (Atkinson, 2009). Most studies on the subject evaluate specific contracting-out projects against narrowly specified project objectives, not against more broadly defined health system goals. For this reason, conclusions of positive effects pertaining to project level may not hold at system level.

Discussion

Wage payment systems at British Airways are invariably based upon theories about human motivation, although sometimes these theories are not made explicit. Indeed sometimes they are not even perceived by those who design and operate payment systems (Mandler, 2002). Piecework incentive systems, for example, are based on the assumption that there are certain kinds of activity which contribute towards some goal of the organisation, and that by offering a financial reward for each such action the manager will motivate the employee to increase the rate at which he performs this activity as far as he is able (Mandler, 2004).

But is this an adequate model of human motives? Do employees always respond to financial incentives in this way? The famous Hawthorne Studies (1) were conducted in the U.S. in the 1930's by Mayo and his colleagues, who thought initially that this was an acceptable theory of motivation. And they set out to discover what kind of environment (in terms of lighting intensity, temperature, humidity, length of working day, frequency of rest pauses and so on) the manager should provide if he is to enable his workers to work at their maximum rate(Lewin, 2006). They hypothesised that the only thing which hindered the employee in responding to the financial incentives offered to him and increasing his output, was his fatigue. And the causes of fatigue could be discovered and an environment provided which would minimise fatigue. Their findings were surprising to them. Their theory of motivation could not explain, for example, why the output rates of one department were increasing when the only item in the controlled physical environment which was varying was the lighting intensity. This was being increased and reduced to find the optimum lighting intensity which would be comfortable for the employees. But they found output increasing steadily whether they put the lighting up or down, and only at the intensity of a moonlit night did output fall, presumably because it is difficult to see under those circumstances. The Hawthorne investigators conducted many more experiments, and one of their main conclusions was that social factors such as the quality of co-worker relationships and the interest in ...