Monday, October 31, 2011

my employee lost money can i make them pay me back?

In this fourth of four articles examining the psychological factors that get in the way of pay-for-performance compensation plans, we look at the third highly influential factor: Loss Aversion. Loss Aversion boils down to this: Money concerns strongly drive performance until personal income targets are met and the employee feels financially secure. At that point the desire to accumulate money becomes less powerful and non-financial motivators become much more powerful. How can compensation planning accommodate this need for non-financial rewards?