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Financial incentives for middle management in British Columbia. Robinson, Bruce Arnold

Abstract

The objective of this study was to determine the use of financial incentives in the manufacturing industry of British Columbia as applied specifically to middle-management personnel. Many unproven statements have been made in the past regarding the use of financial incentives. It has been assumed that incentives were often offered for the purpose of pleasing the employee rather than encouraging improved performance. It has also been assumed that the application of financial incentives in British Columbia industry was less extensive than in United States industry. In addition few of the aspects of other successful incentive plans appeared to be evident among the plans in operation in British Columbia. This study was undertaken to dispel misconceptions and to confirm conditions thought to exist in British Columbia industry respecting the use of financial incentives for middle-management employees. A systematic random sample was drawn from a large group of manufacturers composed of small and large companies engaged in a variety of manufacturing operations located throughout British Columbia. The companies sampled were requested to provide information on their actual use of, experience with, and opinions about various types of financial incentives. The results of the survey indicated that in British Columbia manufacturing industry, as much interest was shown in providing financial incentives for middle management as in offering incentives to top management and to first-line supervisors. In some companies the use of financial incentives for middle management seemed to be encouraged if the company had had previous experience with incentive pay methods among office and production worker groups. Medium-sized companies exhibited more interest in providing financial incentives for middle management than did small- or large-sized concerns. In medium-sized companies it appeared that financial incentives were being used for middle management in an attempt to offset small proportionate increases in basic salaries for this management group compared to recent pay increases for other groups of employees. No company indicated an interest in making large-sized incentive awards which might provide effective motivation of employees. Results from the survey suggested that many firms relied unduly on the granting of salary increases to have a continuing incentive value in encouraging improved employee performance over an extended period. The use of financial incentives for management groups in British Columbia industry seemed to be nominal; they were offered more for the purpose of pleasing the employee with a distribution of a portion of the firm’s profits or with a Christmas bonus than for encouraging specific effort and improved performance valuable to the company. The application of financial incentives in British Columbia industry for all employee groups in management appeared to be less intensive and specifically less satisfactory than some long-established incentive plans in American industry. Few, if any, of the tenets of effective financial incentives exhibited by many of these successful plans were evident among the plans operated in British Columbia.

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