Chart depicting how incentive structures of motivated and unmotivated companies improve work quality.
Companies with the highest motivation to improve quality are the most committed to treating their employees well, according to an Ernst & Young survey of more than 200 small companies. The greatest disparity between motivated and unmotivated companies is in the number offering 401(k) plans, with or without matching by the employer. Of the companies committed to quality improvement, 74% offer some kind of 401(k) plan, whereas only 46% of companies judged unmotivated offer one.
Type of compensation or benefit offered
% of companies motivated to improve quality
% of companies unmotivated toimprove quality
401(k) with some matching
Defined-benefit pension plan
Defined-contribution retirement plan
401(k) with no matching
Nonqualified deferred-compensation retirement plan
Source: Ernst & Young survey of 259 members of the Institute of American Entrepreneurs, Dallas, May 1992.