Tuesday, February 1, 2011
Incentives and Collective Action
Do incentives really promote collective action? Or are they breaking collective action? One can easily say context matters. What kind of contexts requires incentives, and what kind of contexts dont require them to promote collective action. When incentives dont hold the members of collective, what holds them?
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Incentives are definitely an effective way to improve efficiency in an organization. But incentives mainly have impact in improving individual performance and not necessarily collective performance. If management is considering incentive as a tool to improve efficiency it is important to ask a few questions, are interests of all the people in the organization considered? Does increase in efficiency of one individual affect the performance of another? Does it really contribute to collective benefit?
The statement that incentives promote collective action is based on the assumption that individuals are profit seekers which may not be the case every time as in some educational institutions. In such contexts, norms may be broken down due to introduction of incentives. Here, the aim should be value oriented rather than being norm oriented. In context with limited resources and profit seeking behaviour of the members like in milk cooperatives, incentives will do well which will also help to maintain the norms.
Incentives are always for the the individuals.They always motivate the individual to work.It can promote or break the collective action. Like incentive in educational institute for faculty will increase competition in them which is bad for faculty as well as student community. On the other way incentive in milk cooperative promote collective action because if they will work in cooperation then only they will get incentive individually. When incentives dont hold the members of collective then can the betterment of all hold them together?
Incentives, if given to individuals, would lead to competition. Incentives, if given to a collective as a whole, would promote collective action. Also, the nature of incentives need not and should not always be economic. A collective is essentially held together by moral glue. The nature of incentives matters. Economic incentives would make members feel that they are in it for the money. When things are valued in terms of money, the signal that goes is that the moral glue is not good enough or is not valued enough, which has the potential to break the collective.
Incentives are something which can lure any human being. If we consider in the context of management then incentives does play a pivotal role, but in the case where incentives are decided in such a way that it is advantageous to certain sections of the society while the others are deprived then the idea of incentives backfire as of in the long run ultimately resulting in the break down of a collective action.
The basic premise for a collective action is that the group as a whole would benefit more through it than the individuals working separately. For example we wanted the shirt assembling department to work efficiently while the incentives were based on piece rate system which created an imbalance. Later on we started to give incentives on the basis of output of the department rather than the individual. Initially the more efficient workers were not happy but gradually the group started to function as a team. The operators started to collaborate when they realized that the net benefit was greater.
The nature of incentives varies a lot with respect to the individual proclivities. Thus it becomes tedious to zero on a common incentive which can act as a stimulant for all the individuals. Hence it is imperative to consider the contextual aspect for deciding upon the incentives which should appeal to all. The incentives will have maximum impact in the conditions where all individuals are driven equally regardless of individual variations & stem out of the realization of collective action itself. In the conditions where individual’s expectations vary a lot, incentive will fail to have a considerable influence.
Incentives are harmful to collective action as they will promote the accumulating behaviour and malpractices. Incentives may be favored, when someone is deprived of basic sustenance even after putting substantial efforts. If fixed benefits are sufficient to fulfill the needs then incentives should be avoided. overtime payment is given to the workers but not to the officers. Incentives can also promote collective action if they are based on team performance and shared equally by all team members.
In a context where the common good which is being accomplished through collective action is a long term goal i.e. people are going to benefit from it in the long run. The short term incentive would be helpful to attract initial efforts of people, as people want benefits in long run as well as in short run. But incentive becoming the major motivation for collective action is unfavourable for collective action, as in such case people will work only as long as incentives are there.
When incentives are given to the group as a whole then they result in promoting the collective action. Whereas if the incentives are individual based then there might be a tendency to compete for them which may result in the collective action going in for a toss. Also in many cases, incentives might be offered to the individuals to break away from the collective action. In such cases, individual rationality becomes the deciding factor. Many a times, it is not the incentives but the social bonding or commitment that drives people to go in for collective action.
In any collective action, incentives may promote or break the collective action. Incentives is cosidered as the effective way to increase the efficiency of individuals. But in the context of coopeartives, if incentive is given to individuals ,it may create competitive environment among individuals and hence breaking of the collective action.The basic principle of cooperative is the benefitt of all instead of individuals. So the incentives if given to a collective group it will promote collective action.
Incentive may inspire to perform but what kind of incentive?Each individual has different aspirations.In many cases it also leads to conflict one example discussed in class was to incentivise teaching at irma which may leads conflict among faculty members about teaching maximum hours and reducing quality of performance.point I want to make here is incentive may bring you for collective action but may not bring quality participation.Something which rachna said icentive may increase efficiency of individual and reduce efficiency of group.
Incentive can definitely impact the performance to some extent but to solely rely upon them for carrying out the collective action would be a bit too much. The incentive has to be context specific such that the benefits drive individuals to contribute towards the action. For this the incentives need to be designed in such a manner that the realization of collective action actually benefits from it. Thus incentives have to based upon the individual propensities of the target group.
Incentives may promote collective action.On the other hand the individuals participating in a collective action may free ride on the effort of others,if they are working on providing public goods.
The members of the collective are held by a common motive, a common vision, a dynamic leader and a mission to attain
Incentives are harmful for collective action only in the long run, initially it will bring more people in the collective effort since people tend to maximize returns or minimize losses. Also, if people find the incentive of a long run benefit or relationship it will add to collective action and if it is short term either they defect or free ride.However, if incentive is for the whole group it motivates but individual incentive in a group cause envy, dissatisfaction and corruption which is undesirable.
The objective is the fulfillment of primary needs through the collective action where we may have to implement incentive system as a motivating factor. However the focus and the nature of incentives decide the future course to a lot extent. Economic incentive may mar the moral bonding to the action which may result in failure of collective action when incentive isn’t enough to ‘lure’ the participants. The main factor is mindset of the participants with which they have joined hands. In case expectations vary a lot, which can’t be brought together even with the incentives, incentives will have lesser effect.
Incentives have the capability to promote collective action. In incentive based systems norms will get set. Some of the members may agree to this but some may not. If the individual benefits shadowed the collective benefit then incentive has the capacity to break the collectives. In India’s freedom movement people of all religion and region united together and there was no need for any incentive to promote collective action. But if there are no such common goals, incentives may be the only way to promote collectivity.
Incentive plays an important role in collective action but with the necessary condition that the incentive is based on collective performance rather than individual performance. This will be instrumental in bringing in efficient collective efforts. Competition will be fierce if incentive is individual performance based finally leading to the fragmentation of the collective action.
Incentives are one of the ways which can be implemented to bind the collective action. Every individual has his own expectation about the output he will incur from the collective action and incentives work in favor for the same.But some times incentives affect the collective action in a negative way by inducing competition between members and thus increasing individualism.
Indeed Incentives improve performance but the question that arises is to whom the incentives are given? On an individual level incentives give birth to profit seeking behavior where the actions of individual become focused on incentives irrespective of the bigger goal. Whereas when we talk about collectives, incentives given to them as one entity keeping the individualism aside can improve the efficiency and effectiveness of the collective action. When incentives are immaterial for a group what holds them maybe motivation, the clarity and belief of achieving the common goal and benefiting the community as a whole.
Joining the hands for collective action is already an outcome of an incentive as common good to the members. Under this circumstance, any kind of selective incentive will lead to conflict among the members for grabbing the opportunity. This will break the collective action. But in case there is a sub-group in an organisation entrusted with a work then the incentive for that whole sub-group can be offered. This will promote collective action for completion of work on time with efficiency. So I think the real incentive for promoting collective action is common incentive.
Incentives promote collective action when they have more to achieve by moving away from the present status quo. When the already prevailing situation offers them more in terms of individual tangible benefits and the costs they would incur are going to be more, they would prefer to remain in the present situation. Moreover visibility of incentives is another issue and they should be able to directly attribute it to their being part of the collective. For instance if being part of a milk co-operative helps people earn greater incentives than them selling it individually they would come together .
Incentivising a group effort can lead to two outcomes, one the overall performance may improve and second because of free rider issue the productivity of the group may come down. Incentivising individual effort will help motivating others to put similar effort, which intern would improve the productivity of whole collective. It will encourage Competition in Cooperation.
Incentives are the means to lure people to perform better in a way to meet the goal of the organisation. It exploits the profit-seeking nature of individuals. This may not be the best way to promote collective as there is a possibility that the best interest of individual and that of the collective may vary. The incentive then, if any, should be on the output of the collective as a whole. In a dairy collective action, for example, the individual incentives are earned only through the improved output of the collective, which motivates individuals to perform better.
Incentives does play an important role for motivating individuals and for collective action but it is not always true. Sometimes scramble for common incentives can actually drag down the collective action as everyone compete for a particular incentive. This can lead to breach of trust among individuals also. Incentive can bring collective action when people have independent work and one's incentive doesn't have any bearing on others. Other than incentive moral obligation, recognition, responsibility and belief can cause collective action.
Incentives when given to individuals increase the competition among the members. This increased competition reduces the overall performance of the collective action. I think it’s the loyalty and the ownership towards the assignments, which matters more to hold the members rather than the incentives at individual level. E.g. GCMMF (Gujarat Co-operative Milk Marketing Federation Limited) is distributing incentives to its employees on the basis of the overall growth of the organisation in the sales not on individual basis. This helps to glue the members of the group.
I can reflect from my experience in Vedanta Aluminium Ltd,that poeple from different departments work collectively to achieve the monthly production target to get the incentives.The incentive to all drives the collective action among group.But when it comes to the individual perfomance,there will be tussle amomg people and collective action will fail.
Incentives help to improve performance, be it a individual work or collective work. But in case of collective action it may improve for group when incentive is connected in such a way that whole group will be rewarded for work. For eg. In production line of milk pouch, when all workers are required to produce a minimum numbers of pouches from the whole pouch packing assembly line, they worked better as group rather than earlier when individual performance was rewarded.
Mostly it is observed and believed that incentives lead to selfish motives and discourage collective action. Also the convenience offered by the collective action to free ride acts as an incentive. But rewards (materialistic) and incentives also attract the otherwise unwilling people to join and contribute to collective action. Especially moral incentives, where certain actions are considered desirable and right by the society can promote collective action because they attract admiration and respect by the community members.
A collective action is possible, when the takings from the collective work as more as compared to the takings if the same work is performed by an individual. Incentives allure for collective action only when acting as a collective is giving better returns as compared to acting individually. Incentives given to individuals may also result into a contest between the individuals. If incentives are very high , it may increase the risk of corruption and dishonesty between the collective as the focus shifts from collective benefit to individual benefit.
Incentives encourage the collectives in improving their performance but for an individual it may be source for instigating their hidden greed. If incentives are given to the individuals as reward for their good performance, the other members of the collectives will also feel the urge to get such benefits. The aim of incentive must be to improve the quality of the output rather than just monetary reward. Sometimes incentives may motivate the free riders to work and at times can inflict competitiveness among the collectives. The use of incentives should be done judiciously for benefit of collective rather than individual.
Anything that people do, they do it because they realize some incentive in doing so. Now this incentive can be economic, social, spiritual, etc. People definitely need to see some sort of incentive for coming up for collective action but at the same time there could be incentives for breaking away from collective action…….after all its all about which force is more dominant.
incentive will work in favour of collective action if the individual benifit more from collective action rather than operating individually.But if the reason to coperate is political rather than economic then economic incentive wont work but some kind of authoritative incentives will work like power to make decision.But caution should be taken that it does not lead to unequal authority which may be detrimental for cooperation
Incentives would promote collective action when the collective incentive is greater than the group incentive. If the individual incentive is more or even comparable to collective incentive, it would tend to break the collective. Apart from incentives, values and social pressure/norms too at times hold the collective together.
Incentives will always increase competition. Individualization of incentives will definitely lead to increase in competition. In case of an incentive being provided to a department for doing well there will be an increase in cooperation among its members but inter-department competition will increase. In case of an incentive being provided to an organization for doing well there will be an increase in cooperation among its departments but inter-organization competition will increase.
Instances yielding tangible economic, social and political benefits need to be incentivised for collective action. Equitable distribution of incentives increases the cohesiveness. But issues involving the suppression of a fellow individual, with whom people identify themselves in terms of identical caste, creed, economic status etc can elicit collective action against the oppressor even though it never seems to deliver any incentives for the participating public. In such cases, the sense of caste, status, faith etc holds the people for the collective action. They see themselves in the same shoes as that of the oppressed and empathize with the oppressed.
Wherever human beings see incentive, they work to grab it. Incentives for the group as a whole induce collective action. They would come together only when they are assured of reaping shared benefits. The desire to bring about a positive change and feel good about it or the faith on others in group may act as driving forces for being a part of collective action.
Incentives for an individual of any collective will be a feed to encouraging competition amongst the members , which is detrimental to the health of the collective. Malpractices to justify claims to the incentives will be rampant but if the benefits are tied up with the performance of the group we are achieving dual objectives. We are encouraging the collective to grow together and also distribute more benefits in a equitable way. The synergy of the collective is very powerful and equips each member with access to wider resource base and is important in keeping them together
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