Gibbons Case

Introduction

Rewards simply put are benefits or incentives given to the employees to motivate them to fulfill the organizations objective. Employees value these reward and they would use their efforts to gain more rewards. In order to determine the value of the employee to the company, performance evaluation is used by management to measure each individual contribution to the attainment of the organizational goals.

Various reward system exist that management can adopt depending on the task and the type of employees. These reward systems are often combined to create the best fit for the firm but in some case management system assume an undesirable position.

The folly of rewarding A while hoping for B

Steven Kerr (1975) in his work "The folly of rewarding A while hoping for B" postulated that reward systems which were intended to reward certain positive behaviors often end up rewarding the behavior that were not desirable. He cited societal examples from politics, war, medicine, universities rehabilitation centers and orphanages, in which the reward system inadvertently ignores some salient points to wrong behavior and end up rewarding it while the right behavior is not. He further argued that the reason for the prevalence of reward system that went horribly wrong could be summarized into four issues.

a) Fascination with objective criterion which are per-determined and subjective in themselves.

b) Overemphasis on highly visible behavior. This is exemplified in youths being fascinated with the overt glamour than with intellectual prowess.

c) Hypocrisy of management towards perceived wrong behaviors and

d) Emphasis on morality or equity rather than efficiency.

He concluded that the theoretical solution to the problem will be found in employee selection, training and possible altering of the reward system.

In supporting Kerrs postulations, Gibbons (1988) produced his own examples of how reward systems are reinforcing the wrong behavior. A detailed analysis will reveal that Gibbons analysis is in fact correct. By placing high emphasis on sales and profits these organization tend to reward manipulative ability rather than hard honest work.

Complications of Performance Evaluation in Skill acquisition based Incentive

"Performance-based pay schemes in many organizations share the fundamental assumption that the performance level for a given task will increase as a function of the amount of incentive provided". Liljeholm & O'Dorherty (2012) In order to ensure that the organizations gains value for its money a lot of emphasis is placed on performance evaluation. Many organizations tie incentive to time, effort, skill or competence and status. Child (2005, p.158)

However incentives for skill acquisition rather than better performance is increasingly difficult to evaluate, because the organization has to reward contribution to a future firm value rather than the employees realized contribution to date. Gibbons (1988 p 124).This is another situation of a firm rewarding A while hoping for B. Some positions in organizations are filled with "trainable" individuals in the hope that these individuals will develop themselves into assets for the organization.

The salaries paid to these people are not paid for the job currently done but are paid in the hope that the employee will invest in the company by developing