Managers generally have enormous fear of the consequences of removing incentives. They believe people will stop working.
However, companies which remove incentives find that:
• people work harder
• people are more inclined to co-operate
• people develop more concern for the whole system (now the system serves the customer’s needs)
• turnover of people goes down
Most important of all, companies which remove incentives find that performance improves (and quality improves too). People now work on improving their methods.
The way to go about it is first of all to study the system, to discover the ways in which incentives currently work against the purpose of the system.
Studying should involve those who are incentivised; they always add more examples of ways to ‘cheat’. Shared knowledge makes it easy to move to a better pay system.