, The current model for structuring Major League Baseball contracts is flawed. Today, with signing bonuses and guaranteed money, pro athletes\' contracts have become the antithesis of motivation. Today\'s ballplayer gets paid millions of dollars a year regardless of how well he has performed. There is no difference in compensation whether he bats.220 or.320. Other than maybe pride, what is the motivation of players with guaranteed contracts to perform at the expected level?
Incentive pay, also known as \"pay for performance\" is generally given for specific performance results rather than simply for time worked. Most salesmen and production line workers are paid based on performance. You reward your critical talent in a way that motivates them and keeps them engaged. I used to work for a Fortune 500 company that other companies hired to come in and replace the their hourly pay Mlb Jerseys On Sale structure with a performance based one. I don\'t remember the numbers, but the increase in performance (i.e. output) was significant. The other benefit was that a company\'s low performers left because they Mlb Jerseys On Sale weren\'t willing to put in the effort.
Who do you think sells more aluminum siding, the door-to-door salesman who gets paid a steady salary or the one who gets paid on Mlb Jerseys On Sale commission? Obviously, the one who gets paid on commission. He doesn\'t get paid unless he makes sales (performs). Increased sales help both the salesman and the company.
We hear that professional sports are a business. If that is true, and I believe it is, then the team\'s front office personnel and the player\'s agents should adopt the type of incentive based compensation structure that has become more and more popular in the both the private and public sectors over the past decade. Incentive based compensation programs make sense in that they align the interests of the organization with that of its key personnel.
So if this business model is good for corporate America, why wouldn\'t it be good for professional sports?
How many times have we heard that sports are a business? I am a strong advocate of incentive based compensation in sports. My primary focus is Major League Baseball (MLB). I\'m also a realist, knowing that the player\'s union would never approve incentive based pay and why should they when there are owners dumb enough to pay players like Jason Werth $126 million to bat.232 and drive in 58 runs. Add his.229 average with runners in scoring positions (RISP) and you have the perfect candidate for incentive based compensation.
The Washington Nationals aren\'t the only team in the dumb and dumber category. The Boston Red Sox paid Carl Crawford $142 million (BA -.255, RBI - 56 RISP -.231) and John Lackey $82.5 million who compiled a 12-12 record with ERA of 6.41 and a Batting Average Against (BAA) of.308. Let\'s not forget the Chicago White Sox. They paid Adam Dunn $56m (BA -.159, RBI - 42 RISP -.142), plus a 177 strikeouts in 415 at-bats.
To further prove my point that players perform better when there is an incentive to do so involved, check out the numbers these guys put up in the final year of their contract:
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