When employee incentives are used correctly, they can have a substantially positive impact on the entire workforce. 
Research shows that incentives can significantly increase workers’ motivation and productivity.
Plus, they allow workers to reap the rewards of what they achieved.
All too often, however, employers try to use incentives in ways they’re not meant to be used — and that results in doing more harm than good.
Here are four such examples, as pointed out by compensation consultant Ann Bares on CompensationCafe.com:
1. To fix larger problems
Granted, a little incentive can go a long way toward getting employees to go above and beyond their traditional roles, but firms have to be careful.
All too often employers will dangle a carrot — cash, extra vacation time, etc. — in the hopes employees will do great things despite problematic processes and limited resources.
When an entire company process could use an overhaul, employers would be better suited to use those incentive funds to find and correct inefficient processes.
2. As a buffer
Sometimes employers will use incentives as a buffer against poor-performing employees.
The thinking is that top-performers will pick up their slack and garner the rewards. In many cases like this, companies will offer incentives for tasks that should be part of everyone’s job description.
When slackers aren’t carrying their weight, it’s not fair to other workers — and it means the business isn’t running as efficiently as it should be.
3. To avoid regular feedback
Another common misconception about incentives: They eliminate the need for regular manager feedback.
Even though employees know what they’re trying to achieve, nothing replaces having a supervisor regularly checking in to let the worker know how things are going — as well as where improvements can be made.
4. To enforce policies
As Bares points out, following company policy should be a non-negotiable part of the job — not something that employees are cajoled into doing using incentives.
The same can be said of essential job requirements. You shouldn’t have to dangle carrots in front of employees to get them to perform the essential functions of their jobs.
