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Jo Smith

MBA 515-Management

Dr. Little

December 4, 00

“Motivating Employees”

Businesses and organizations are increasingly implementing new and innovative incentive programs in order to motivate employees, increase productivity, and reduce absenteeism. One such company is International Paper (IP), a liquid packaging firm that manufactures juice and dairy cartons, located in Plant City, Florida. According to Sandy Smith (00), International Paper has recently begun using rewards and recognition programs in order to motivate its employees to pay greater attention to safety practices. Age-old trends of rewarding employees based on accident statistics are a thing of the past, according to Smith (00). Instead, IP is looking for ways to motivate its employees to improve safety practices at the plant.

According to Seth Marshall, President of Safety Pays Inc, “The point of motivational programs is to make the work force pay attention to the safety infrastructure” (Smith, 00, p. ). Thus, IP chose to implement incentive programs and rewards, which would hopefully help motivate employees to pay attention to standard safety practices. For instance, one such motivational tool is a “gain sharing”, or profit sharing, program at the plant. Each employee earns a cash bonus for specific activities related to waste reduction and safety. For example, every month at IP, each employee is expected to conduct four safety observations of their co-workers. Each employee who completes the observations receives an additional 5 percent toward the profit-sharing amount. Further, if every employee at the plant conducts their observations, all employees receive yet another 5 percent.

In addition to gain-sharing programs, IP is working on other safety incentive programs, which aim to “recognize team performance utilizing injury and illness rates…Structured like a horse race, teams will ‘race’ each other for points, and prizes will be awarded…”(Smith, 00, p.4). IP’s safety incentive programs will include both monthly and quarterly grand prizes, such as vacation cruises. According to Theresa Childers, EHS coordinator at IP, “I can’t tell you how much we’re going to spend on [the incentive reward program], but it’s substantial. The rewards are worth it” (Smith, 00, p.4). The rewards Childers speaks of are significant decreases in job-related accidents and injuries, as well as increased productivity and a reduction in absenteeism.

Although Childers believes that IP’s incentive programs do indeed motivate employees to pay closer attention to safety procedures and hazards, some critics argue that such reward-based programs merely serve to keep injuries and accidents under-cover. That is, some managers believe incentive programs only motivate employees to hide their injuries in order to obtain rewards.

However, Mike Hadlow, president of US-Motivation in Atlanta, reviewed some recent findings that suggest incentive programs do indeed increase employee motivation. For instance

· Incentive programs aimed at individual workers increase performance by 7 percent

· Programs aimed at teams increase performance by 45 percent

· Incentive programs have an equal, positive impact on quality and quantity goals

· Long-term incentives are more powerful than short-term (44 percent gain v. 0 percent gain)

(Smith, 00, p. )

Thus, incentive programs clearly do have an impact on employee motivation. According to Buck Peavy, president of Peavey Performance Systems, “In theory, we shouldn’t have to have incentive programs to motivate people to work safely. In reality, rewards and recognition will boost safe behavior and motivate people” (Smith, 00, p. ).

A second firm cited in Smith’s article was West Valley Nuclear Services. Cathy Atkinson, administrator of the Pollution Prevention Program, came up with a new way to motivate employees to pay attention to pollution standards. For example, each employee received points for coming up with a pollution prevention idea, more points for developing a plan to implement the idea, and even more points for actually implementing the plan. Employees used these points to purchase products such as sporting equipments and gas grills. And, each quarter, like IP, West Valley had a grand prize drawing for employees with the most points, and usually gave away a vacation cruise.

According to Atkinson, “Our motivation program was extremely successful and the payback was substantial” (Smith, 00, p. ). For example, employee suggestions resulted in saving West Valley $. million over an 18-month period. One particular employee simply suggested saving energy by installing timers on the light switches. This suggestion saved West Valley $0,000 to $0,000. Other employees suggested ideas such as using recycled paper and buying “green” software. Apparently, the reward program both motivated employees and rewarded the firm as a whole.

Smith’s article clearly conveys how successful incentive programs can really motivate employees with respect to many aspects of a firm’s operations. Although the programs may indeed be costly, the benefits appear to exceed the costs, and result in a higher degree of employee motivation. Since employees are primarily increasing their inputs in order to obtain tangible gift-based rewards, as most other employees are doing, equity theory certainly applies to such firms as IP and West Valley. That is, the firms are not necessarily relying on classic motivational theories that suggest employees are motivated by a need for power, achievement or responsibility. On the contrary, the firms are aiming to increase employee inputs by providing tangible rewards. Expectancy theory also applies, with respect to performance-reward linkage. That is, if an employee truly desires the rewards that the firm offers, he or she can be expected to perform at a level that would provide the employee with such a reward. All in all, IP and West Valley’s reward-based incentive programs do indeed appear to strongly increase motivation.


Smith, S. (00). “Safety incentive it’s not just a breakfast anymore; coffee and donuts

are giving way to increasingly creative ways to motivate and reward employees

for their safety and environmental management efforts”. Occupational Hazards.

June 00. Retrieved Nov. , 00 from


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