Describe two major reasons why incentive plans fail.
What will be an ideal response?
Varies but should include two of the following five reasons. The first is bad management--managers have to manage the incentive program, and if they fail to do so, employees won’t trust the program. Second, programs may be so complex that people can’t figure them out, so they don’t change their behavior. Third, plans may not really increase the potential rewards available or the rewards may not appear significant to the employees. The fourth problem is that in a lot of cases, employees can’t affect the desired outcomes by their actions. Finally, in many “reward” programs, employees never know how they are doing, so they don’t know whether or not to modify their behavior to change their output.
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Under dollarization, a country
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