Managing through Incentives How to Develop a More Collaborative, Productive, and Profitable Organization

by McKenzie, Richard B.; Lee, Dwight R.

• ISBN13: 9780195119015
• ISBN10: 0195119010
• Format: Hardcover
• Copyright: 1998-09-24
• Publisher: Oxford University Press

Summary

Incentives are the most powerful tools executives can use to improve worker performance. This is particularly true in today's empowered workplace, where incentives can ensure that workers apply their initiative toward company goals. Now, in this groundbreaking book, Richard McKenzie and Dwight Lee show how to select the right incentives and how to use them for best results. Generously illustrated with examples from business, industry, government, academia, and professional sports, this superb volume offers a comprehensive overview of incentives, both in theory and in practice, providing a wealth of ideas managers can use to get employees to work harder, smarter, and more cooperatively. Much of the book is quite eye-opening. For instance, while McKenzie and Lee recognize that money is the prime motivator, they urge managers not to overlook the power of non-monetary incentives, carefully evaluating such motivators as fringe benefits, psychological incentives, education, and training. And they examine a host of other issues, including how to take advantage of executive "overpayment" to increase profits; the limits of piece-rate and other pay-for-performance schemes; finding the right balance between current pay and a more generous pension plan; the value of tough bosses; and hostile takeovers as a form of managerial incentive. How workers are rewarded is often more important than how much they are rewarded, say the authors. The job of good managers is getting the incentives right. Managing Through Incentives shows managers how to apply proven motivators to help any size firm energize the work force, increase its profits, and meet the awesome challenges of today's fiercely competitive global economy.

Author Biography

Richard B. McKenzie is Walter B. Gerken Professor of Enterprise and Society in the Graduate School of Management, University of California, Irvine. He lives in Irvine. Dwight R. Lee is Ramsey Professor of Political Economy in the College of Business, University of Georgia. He lives in Bogart, Georgia.

Table of Contents

Preface	ix
I. Introduction	3	(46)
1. Why Incentives Matter	3	(19)
2. An Economic Look at Incentives Within Firms	22	(27)
II. Worker Incentives	49	(110)
3. The Value of Tough Bosses	49	(19)
4. The Value of "Teams"	68	(16)
5. Paying for Performance	84	(19)
6. Paying Above-Market Wages	103	(16)
7. Fringes, Incentives, and Profits	119	(15)
8. Cutting Health Insurance Costs	134	(9)
9. Paying Worker's Education and Relocation Costs	143	(16)
III. Executive Incentives	159	(52)
10. Executive "Overpayments"	159	(16)
11. How Debt and Equity Affect Executive Incentives	175	(8)
12. The "Hostile" Takeover as Managerial Incentive	183	(14)
13. How Honesty Pays in Business	197	(14)
IV. Firm Incentives	211	(68)
14. What Firms Should Do	211	(13)
15. The Last-Period Problem	224	(12)
16. Pricing with Incentives in Mind	236	(13)
17. The Value of "Mistreating" Customers	249	(11)
18. Profits vs. Corporate Social Responsibility	260	(8)
19. Why Professors Have Tenure and Businesspeople Don't	268	(11)
V. Final Words	279	(20)
20. The Case Against the Case Against Incentives	279	(12)
21. Managerial Lessons in Incentives	291	(8)
Notes	299	(32)
Index	331