As the nation industrialized in the late 1800s, companies became bigger and more efficient but also more impersonal. As some workers organized to raise pay and improve working conditions, managers sought to motivate employees and shape their work ethic with an array of incentives and techniques. They pushed employees to work faster, longer, and more safely, and to not join labor unions. Managers also desired innovation, sharing of ideas, and increased employee contentment.
In preindustrial America, farmers and artisans owned their own tools and managed their own production. They did not need incentives because they worked for themselves.
Work Incentive Posters
In the 1920s a new generation of managers began to use posters to communicate ideas to workers. Posters, like the advertising art on which they were based, combined attractive graphics with clever words to convey managers’ messages. By the 1980s companies began using a new tool—mission statements—reminding workers of corporate values. In a break from the past, many of the modern messages were directed toward mid-level managers, not hourly workers.
Recognition programs cost companies relatively little but often significantly boost employee morale and customer awareness. By creating teams and a collective feel, managers seek to increase camaraderie, gain valuable ideas, and encourage employees to motivate each other. The strategy also reduced the need for oversight and transferred some of the burden of enforcing discipline to the workers.
A paycheck is important but not the only way to inspire loyalty and hard work. Employee competitions, and the resulting peer recognition, are one of the oldest forms of worker incentives.
Pay and Perks
Offering performance-based bonuses, stock options, and pay based on units produced often has a big impact on workers’ and even owners’ efforts. But welfare capitalism, where companies provide services not just pay, often does even more. Giving workers perks like recreational clubs, subsidized lunch, and company outings help instill company values and thereby boost productivity. Additionally, having food or other services handy means that workers tend to stay in the building and work more.