List key factors that could lead to failure of a contingent pay ...

[mydiamond]

List key factors that could lead to failure of a contingent pay plan.
 
  What will be an ideal response?

Question 2

Under what conditions can a contingent pay plan help improve an employee's motivation?
 
  What will be an ideal response?

[ktidd]

Answer to Question 1

Key factors that could lead to failure of a contingent pay plan include:
 Poor performance management system in place
 Rewarding counterproductive behavior (folly of rewarding A while hoping for B)
 Rewards are not considered significant
 Managers are not accountable
 Extrinsic motivation at the expense of intrinsic motivation (employees may not be interested in their work, the environment may not be challenging, or they may lack control over what they do and how they do it)
 Disproportionately large rewards for executives

Answer to Question 2

A contingent pay plan can help improve an employee's motivation when:
 Employees see a clear link between their efforts and resulting performance (expectancy).
 Employees see a clear link between their performance levels and the rewards perceived (instrumentality).
 Employees value the rewards available (valence).