Monetary Rewards: Wells Fargo And Looking Backward

Problem 2 When setting goals for employees it is important to set a goal that is reasonable and manageable, if not there can be many unintended consequences especially if it’s linked to compensation. Wells Fargo is one company that has to revamp their pay structure due to unintended consequences with their sale incentive structure. Wells Fargo’s employees opened over 3.5 million unauthorized accounts in order to meet the sales goals and earn their incentives. This has caused Wells Fargo to lose over 5,300 employees and has cost them millions of dollars in fees. (McCoy, 2017). Sales incentive programs can cause employees to respond with fear and greed which can cause them to use more aggressive sales tactics or cheat in order to reach their

Some examples of non-monetary rewards are; employee autonomy, verbal recognition, increasing benefits, etc. By increasing benefits such as more paid time off or better family benefits show employees that the organizations care about them and is supportive of an employee’s work-life balance. By increasing verbal recognition, it helps motivate employees to do better and increases their overall job satisfaction. “Studies involving non-monetary incentives and job satisfaction show positive relationships.” (Abdullah & Wan, 2013). Using non-monetary rewards is more beneficial to an organization because employees won’t use unethical behaviors in order to receive them and some rewards such as verbal recognition can be given out more frequently. “Employees are motivated when they feel appreciated and recognized for their contributions.” (Lai, 2017). By simply recognizing employees for the hard work that they do and giving more verbal appreciation it will keep employees motivated longer than monetary incentives. Using non-monetary rewards can also help increase job performance in employees. “… non-monetary incentives which are represented by recognition, learning opportunities, challenging work and career advancement, have been found to be an effective tool in motivating workers and consequently increasing their performance.” (Abdullah & Wan, 2013). Non-monetary rewards are able to be given out more frequently which can keep employees motivated to receive these rewards. Wells Fargo could benefit from using more non-monetary rewards for reaching sales incentives because it doesn’t cause unethical behavior and people won’t be worried about losing their jobs/money if they can’t complete their goal. Also using non-monetary rewards keeps employees motivated which can cause employees at Wells Fargo to use more ethical behaviors to reach