Extended Discussion: Variable pay for variable work?

One of the classic analogies for discussing an organisation and its parts compares it with a human body. While there are different parts of a body, they all-ideally-work together in harmony as they go about their different tasks for the good of the whole. This analogy is useful because it focuses attention on two important organisational dynamics.

First, not all jobs do the same thing. Different teams in an organisation are engaged in different kinds of work that may involve radically different skills and motivations. A manufacturer's art department does not function the same way as the assembly line-what works well in motivating one will not necessarily work for the other!

Second, the body analogy emphasises the interconnectedness of the different parts, reinforcing that the different parts need the others in order to accomplish the stated goal. While one team may receive more outward glory and a corresponding salary than others, these differing rewards should not become matters of resentment for the others lest it harm the system as a whole. In this Discussion, you will consider the variable-pay scheme and its implementation in an organisation.

To complete this Discussion:

Post: Variable-pay programs are an effective way of motivating people. For that reason, they have been implemented in many companies, but not necessarily across the board. For example, at IBM the sales force is rewarded according to such a program, while the system engineers are not.

Consider the wisdom of this decision. Discuss the factors around the roles, responsibilities and motivations of the different teams and how that may impact the choice to use a variable-pay program or not. Illustrate your position by providing examples from your own experience.