Our compensation studies focus on the push and pull of organizational rewards systems, and their direct link to employee behaviours. These systems are built on theories of human motivation, which guide our thinking about the way employees are supposed to react and respond in order to achieve organizational goals.
Usually these rewards systems focus on positive outcomes based on targeted goals. Positive outcomes are meant to reinforce constructive employee behaviours. What happens, however, when the pressure to achieve an expected goal overwhelms the employee’s ability to behave in a positive way?
The TD Bank Group has been in the news recently due to its targeted sales practices that have resulted in allegations of unethical and possibly illegal employee behaviours.
Click here to view the CBC report.
Click here to view the follow up CBC report.
While the allegations by employees in these reports are shocking, the revenue goals for the bank have been achieved. Bank profits have increased. Sales targets have been met. Underperforming employees have been placed on ‘Performance Improvement Plans’ to align expected behaviours with targeted sales-based performance objectives.
The questions must be asked: At what cost? Do the ends, in this particular situation, really justify the means?
This case appears to provide an extreme example of fear-based motivation. Fear of job-loss overrides the ethical judgement of employees and forces them into negative behaviours. The negative behaviours have a lesser consequence for employees than that of losing their jobs. In the context of Maslow’s hierarchy of needs theory (outlined in our compensation studies), job-loss for these employees means that they will be unable to provide food and shelter for themselves and their families. The choice to ensure that an employee’s personal food and shelter needs are met has a stronger pull than making ethically sound decisions for others.
This case points an accusing finger, not at the individual employees, but at the senior executive managers within the TD Bank Group, and at the system of rewards that are in place to motivate and influence the whole.
Discussion Questions:
- After reviewing the two articles, identify specific elements of motivational theory that are evident in employee reactions.
- As a bank manager, what types of rewards would you implement in order to influence employees to achieve profit-related targets?
- As an employee required to achieve these types of sales targets, how would you respond? What decisions would you make based on your personal ethics and values?