Employee Incentives

I recall from high school having a friend, who we’ll call Dylan, who worked as a cashier for the local Safeway after school and on some weekends. He related to me how there were great disparities in how much work was expected out of employees depending on what position they held. For example, cashiers and managers often had quite a lot on their plate at this Safeway, whereas people who worked in produce or dairy often had a lot of “free time”. Dylan found this rather aggravating over time as he was paid pretty much the exact same as any other low-level Safeway employee despite the fact that he was required to do his job as a cashier quickly and accurately, whereas others could get away with doing very little.

Eventually, Dylan moved over the produce department and noticed the difference right away. As the lecture Designing Incentive Programs noted this week, employers often use measures to tell how well an employee is doing, such as checking to see how many customers a cashier sees, the amount of product scanned per hour, and the balance of the till. You can use the measures to determine if an employee needs to be rewarded or not, and at Safeway they were generally quite careful to keep track of such measures with cashiers. Once Dylan moved to produce, he realized that practically no one cared how fast you worked or if items were being restocked appropriately. So long as this section of the store wasn’t a complete disaster you were free to spend much of your day doing nothing particularly useful while getting paid the same as those who are productive.

Naturally, the lack of standards being applied to this department made life quite relaxing for those working there, and Dylan would mention how much easier it was than before. In fact the laxness extended beyond just poor work, as Dylan said some produce employees would even steal from the store, something that you would be a lot harder pressed to get away with as a cashier. In the end Dylan really wasn’t concerned, as the transfer to this new position meant he got to work less for the same pay, and most people could hardly blame him. Had the situation been that cashiers get paid more or could receive bonuses for exceptional work it is far more likely that Dylan would have felt less aggrieved by what went on at produce, but because Safeway paid the same for far less work in some departments it incentivized this sort of behavior.


Myers L., Week 8 Lecture 5 Designing Incentive Programs, https://canvas.oregonstate.edu/courses/1936538/pages/week-8-learning-materials?module_item_id=23510058

Got any book recommendations?