Designing Incentive and Reward Structures
The quality of an educational institution depends on mutual effort from administrators and faculties alike. While the faculty works hard to teach the students and creating cutting edge research, the administrator focuses on the quality of resources and services provided by the university. This makes faculty retention a crucial component of institutional success.
One way of retaining impactful faculties is creating an attractive incentive structure. But there is no "one size fits all" approach to designing an incentive structure— they must be designed to fit within the culture of the institution. Approaches that are tailored for a western nation like the United States may not be appropriate for an emerging nation like Vietnam.
Learning Objectives
After completing this section, participants will be able to:
Distiguish between a reward and an incentive
Identify the appropriate incentive structure for their institution
Recall the importance of a well-designed incentive structure
Why are Incentives Important?
Incentives encourages desired behavior
Incentives can encourage individuals to engage in certain behaviors that are beneficial to an organization or society as a whole. For example, offering bonuses to faculties who meet certain performance targets can motivate them to work harder and improve their productivity.
Improves motivation
Incentives can improve an individual's motivation to perform a task or achieve a goal. When individuals see a tangible reward for their efforts, they are more likely to persevere through challenges.
Helps to attract and retain talent
Organizations that offer competitive incentives are more likely to attract and retain talented individuals. Employees are more likely to stay with a company that values their contributions and rewards them accordingly.
Enhances satisfaction and morale
Incentives can enhance job satisfaction and morale among employees. When employees feel that their contributions are valued and they are being rewarded appropriately, they are more likely to feel satisfied and motivated in their work.
Helps to achieve institutional objectives
Incentives can be used to align individual goals with the goals of the organization, helping to achieve business objectives. For example, a paid vacation can motivate the faculty to achieve publication targets, which in turn helps the organization to achieve better reputation.
Questions to Consider for Senior Leadership
What intrinsic motivations do faculty members have to improve their teaching? And how can university leadership leverage those motivations?
If faculty members highly value collaborative opportunities, how can administrators leverage models like faculty learning communities to foster that value collaboration? Or if faculty members value recognition of their work, how can administrators spotlight excellent and innovative teaching practices, both within and external to the institution? You need to better understand the intrinsic motivations of their faculties.
If this is a going to be a long-term project to improve teaching, how can you make these incentives and rewards part of the regular system they work in?
Incentives could be shorter-term, but rewards need to be long-lasting and built in.
How do you intend to shift the university culture to keep the intrinsic motivations alive?
Be aware that intrinsic motivations may change over time, so do not assume a focus on community is all you need long-term. Are you shifting culture to keep that value alive and meaningful for faculty?
Are you balancing the reward for teaching and research equally? Is one side getting overlooked? What can you do to keep certain faculty from getting discouraged?
There needs to be a balance with incentives to keep the faculty engaged. If research rewards are twice as beneficial as those for teaching, people are more likely to neglect their teaching duties. Are you making sure teaching faculties are as enthusiastic about their job as well?
What type of immediate reward can you plan for?
Immediate rewards, and preferably some sort of incremental incentives/rewards are important because working a long time for the hope of a possible reward may not be adequate.
Further Reading
Fenker, R. M. (1977). The Incentive Structure of a University. The Journal of Higher Education, 48(4), 453–471. https://doi.org/10.2307/1978654
Miller, J. C., Coble, K. H., & Lusk, J. L. (2013). Evaluating top faculty researchers and the incentives that motivate them. Scientometrics, 97, 519-533.
Rockwell, S. K., Schauer, J., Fritz, S., & Marx, D. B. (1999). Incentives and obstacles influencing higher education faculty and administrators to teach via distance. Faculty Publications: Agricultural Leadership, Education & Communication Department, 53.