As the book states, an indifference curve "defines the combinations of goods X and Y that give the consumer the same level of satisfaction." In the textbook it states that workers view leisure and income as goods. They then substitute them at a rate along indifference curves. For people to give up their life outside of work, compensation must be at a certain level for them to consider it. However, there are some ways that managers can find ways to encourage workers to increase their output if compensation is off the table.

One way I believe is something to get employees to increase their output without paying them more is giving them more benefits. If someone hits a certain mark of output, they get something. For example, if you hit a certain mark you get to add a vacation day to your already accumulated vacation days. I read an article from achievers.com. They talked about a points-based recognition program that I believe would work for a lot of people. The article explained that you make a certain amount of points and those points get you rewards. Those rewards could be anything from apparel, gift cards, experiences, technology, free hotels, and more. This is not direct compensation because the managers don't have to directly pay them for all hours or extra hours, but they do get a little reward that is cheaper than paying them more.

Another important thing is encouraging professional development. Having development opportunities while continuing your current job is crucial. Having learning events, learning systems, and more to allow your employees to train outside of work. You can expand your education and skills to develop your future even further. Bringing in educators or workshops is also important as well. Offering services and having people or resources available to continue educating your staff is crucial because it helps every single person involved, especially a managers firm.

I believe that the things I mentioned can sometimes be more beneficial to increasing output than slapping more money down would. People care about developing themselves professionally and care about being professionally recognized. Not everyone is always money driven, people want to hear that they are cared for and appreciated, and with the point system I mentioned above people will feel like that. Money can be so impersonal sometimes, which is why offering benefits and professional development can help.

Do you think employees would buy into a point system?

Baye, M. (2021). Managerial Economics & Business Strategy (10th ed.). McGraw-Hill Higher Education (US). https://mbsdirect.vitalsource.com/books/9781264574391Links to an external site.

Wong, K. (2023, March 23). 10 employee incentive programs to engage your team. Achievers. Retrieved March 27, 2023, from https://www.achievers.com/blog/employee-incentive-programs/Links to an external site.