Are all incentives ethical?


Last month we looked at performance related incentives and asked do they work and are they the right thing to offer? As we were pulling together the material for the blog another question raised its head – “Is it right to use incentives as a form of power to make people behave in a way that is not natural for them, in order to conform to an incentivised workplace?

This was such a big moral and ethical question that we felt it deserved a blog of its own!


Manipulative incentives

Manipulative incentives are not uncommon in the workplace (see previous blog). Many companies incentivise productivity and sales over quality and customer retention. Bonuses can be very attractive when you have a very basic salary, encouraging employees to push for more conversions. This, even though it might not be right for the customer and possibly even feels disingenuous to the employee becomes imperative when the rent needs to be paid. There is a great deal of researched evidence that bears out that this type of incentivising can encourage dishonesty.

“A sales person who commits fraud, deceives a client or who ignores industry safeguards is harmful to an entire organisation and may be driven to do so by the incentive being offered to reward exemplary performance”, says moral philosopher Dr Matthew Beard an Adjunct Lecturer at UNSW Canberra’s School of Humanities and Social Sciences and from the Ethics Centre in Australia.

“Where winning was due to performance, not luck, winners develop a sense of entitlement that justify acting dishonestly later”, he observes.

So where does this leave us?

Playing the game

Having touched on learned behaviours that come as a result of proactivity incentives, employees can quickly learn to ‘play the game’ doing the bare minimum in order to meet their goals. Research tells us that this result can conversely trigger a steady decline in work ethics and productivity.

Coercive Incentives

The Law Dictionary definition of this is: The reason to act or behave in a certain unwanted manner under coercion. It is reasonable expectations of the use of physical force or execution of abused authority.

Let’s take this to one possible conclusion…

When coercive incentives are employed, staff feel pressurised into conforming to behaviours that are not natural for them; they may feel they have little choice in their responses. And not all companies are aware that they are inflicting this on their staff. When a company undertakes a new incentive scheme it is advised that they think about the aim of that scheme, is it to encourage certain behaviours, increase productivity, sales, or to improve the culture and team spirit of the company?

Recently we have heard of an increasing number of companies who have instigated Wellness Programmes – how can they be coercive you may well ask?

Picture this scenario, a company wants to improve the health and wellbeing of its staff so that it has less sickness, greater productivity and lower turnover; all great aspirations on paper.  Employers offering incentives to demonstrate progress on healthcare goals such as weight loss, improved blood sugar readings etc are increasing, with the USA leading the way. Today, a growing percentage of companies across the globe ask workers to answer lengthy questionnaires about their health, including exercise, drinking habits and mental health wellness, with some even going as far as testing.  In many cases this is not an opt-in scenario, but an obligation to fulfil certain requirements (which may be health and safety related in some industries) in order to qualify for bonuses or even company medical cover.  The company have now positioned themselves into coercing employees by making the ‘incentives’ mandatory and not skills led.  A fine line… and you can understand how easy it is to cross it…

Incentives work well when they bring positivity to the workplace, they work well if they encourage team play and they work well when the benefits are well understood.  There are many more examples where companies have been so close but have missed the positioning of the incentive to the detriment of the ambition. As we all try to manage our productivity, sales and customer satisfaction, boundaries will always be pushed… the question is – “How far is ethical?”

Our blogs are here to stimulate thinking. The world of employment is increasingly complicated as are our expectation of staff and, conversely, their expectations of employers. We would love to hear your take on incentivisation, where it has worked for you and if you are brave enough – sharing where it has failed!


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