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Manager
Manager
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Status: Dream big, work hard, and drink gallons of beer!
Joined: 11 Jun 2011
Posts: 213
Concentration: Finance, General Management
GMAT Date: 10-01-2011
WE: Web Development (Consulting)
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Feedback and rating required for Analysis of an issue [#permalink] New post 14 Sep 2011, 10:37
Issue: Monetary compensation is the most powerful stimulus for improving employee productivity.

Discuss the extent to which you agree or disagree with the position stated above. Support your viewpoint using reasons and examples from your own experience, observations, or reading.

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The issue at hand is that monetary compensation is the most effect way to improve employee productivity. This may be partly true but not in its entirety. In some companies in spite of compensating best in the industry, people are not most productive. Here are three reasons why monetary compensation may not be the most effective tool to increase employee productivity.

First off, for companies in which employees are not satisfied with the management because of poor handling of grievances or harassment from immediate supervisor, monetary compensation may not be the most effective tool to increase employee productivity. Because the reason for these employees why they are not as productive as they should be is that they are not satisfied with current management. Talking about issues and resolving grievances are the most apparent solutions here.

Secondly, employee productivity may be suffered because of the role that employees are playing currently may not be of their choice. Several studies have shown that interest has direct impact on the productivity of the people. If people are not interested in playing the current role or completing the current assignment, productivity will not be increased even if they are compensated for choosing a boring job over a job of their interest.

Third, employee productivity may suffer because of the personal trauma or emotional issues employee is going through currently. These issues could range anywhere from a recent divorce, a loss in the family, or an illness that may be bothering an employee. In these situations, supporting employee in the bad patch of his or her life could be the best solution.

To sum up, monetary compensation could be a very good tool to keep employees motivated but not appropriate in all situations. To effectively increase the productivity, one must find out why productivity is suffering. There may be numerous reasons for not being productive to one's potential. If not being compensated well is the only reason why employees are not productive, monetary compensation may be most effective.
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Feedback and rating required for Analysis of an issue   [#permalink] 14 Sep 2011, 10:37
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