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).
Interaction web of factors that might influence locust population size.
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