The Incentive Debate

In the modern manufacturing industry the monetary incentives began to be used more than one hundred years ago.

If you like history, you can see that a Roman Emperor (Augustus Caesar) used it for his armed forces.

Although, there are enough knowledge and experience on them we are still debating them.

Some car dealerships pay their salesforce only commissions on sales and some a fixed salary. The same happens with furniture stores. Some people are proposing “merit pay” for teachers to improve the quality of teaching.

One of the “Principles of Economics” say that “people respond to incentives”. What do you think?

a. Are monetary incentives desirable? [Some authors also talk about “non- monetary” incentives, such as a job in which you learn, etc.

b. Do they obtain better results?

c. Is easy to agree in incentive system?

d. How is the administration of this systems?

e. Which are the challenges?

f. Do people in different countries respond to incentives in the same way?

Minimum 150 words. This is a discussion in class, not a paper. Cite all work.