The Cost of Quid Pro Quo: Why It’s Time to Rethink This Approach to Workplace Performance

CoachHub · 20 March 2023 · 7 min read

Quid Pro Quo is a legal latin business term that takes its origins from as far back as the European middle ages. Over the years, quid pro quo has been used to reference a business strategy where two parties are involved in a business agreement to exchange one product or service for another reciprocally. Simply put, it is a business arrangement where one person exchanges their goods or services for another individual’s goods or services.

Even before the term became popular in the business world, human beings have been engaging in different forms of quid pro quo or “trade by batter.” Before the concept of money was invented, and even after, quid pro quo was used as a means to access desired goods and services in several parts of the world.

In the workplace, quid pro quo is a system where employees are paid based on their performance. This approach is prevalent in organisations that are centred around individual performances in the workplace, especially those companies that operate with sales driven models. In such organisations, employees are given incentives for completing certain targets.

Quid pro quo has been a common approach to workplace performance because it served as a metric for measuring employee improvement. In some cases, it also served as an incentive to push employees to work harder, especially since the compensation they get would be dependent on how well they can meet up with the business targets.

While quid pro quo was formerly a popular system for measuring workplace performance, a lot of problems have arisen in recent times regarding its misuse as it relates to ethics in the workplace. Experts have argued that quid pro quo may no longer be the best way of providing compensation to workers and there are several reasons why.

quid pro quo

What is Quid Pro Quo?

In the business environment, quid pro quo is also referred to as incentive compensation. It is most commonly used by companies whose returns centre around sales. In these companies, employees need to meet up with certain goals or targets in exchange for compensation. The incentives can take the form of cash payments, bonuses or commissions. The payout is dependent on the kind of achievement the employee is able to make. Payouts typically increase when the achievement level increases.

There are many reasons why companies use quid pro quo as a system of compensating employees, one of which is risk management. Managers aren’t always sure of the efficacy of new hires, and quid pro quo is a way of protecting the company from losses if the new hire doesn’t perform up to expectations. So, there is a pre-existing agreement between the new employee and the company that they will not receive the potential bonus if they do not perform up to expectations.

This system is used to ensure that the new hire is a suitable fit for the company.

Quid pro quo can take different forms in the workplace. In an organisation where the employees are paid based on the number of customers they can get, the commission increases based on the level of the target reached. Hence an employee who is able to get a larger client base will get a larger commission.

Promotions can also be a form of quid pro quo where employees are rewarded for completing goals on time or contributing a lot to their teams.

In some situations, quid pro quo is legal in the workplace, however, there are many instances when it becomes illegal. In the political scene, several conversations have erupted around the legality of quid pro quo in the workplace, especially its abuse.

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The Downsides of Quid Pro Quo

Several arguments surround the efficiency of quid pro quo in the workplace, especially because of its potential downsides. Many experts and sociologists believe that there is a serious potential for the abuse of quid pro quo by organisations.

The negative impact on employee morale and well-being

In situations where quid pro quo is abused by superiors to withhold benefits and bonuses from workers, employee morale is seriously affected. Their mental and psychological wellbeing takes a blow that prevents them from experiencing any kind of joy from their job. Employees become reluctant to put in their best in situations where they are being forced to work more. This can create a real problem for the organisation in the form of higher employee turnover. If not checked, this increases costs for the company.

The risk of discrimination and harassment claims

In diverse work environments, there is always the risk of discrimination and harassment claims. This risk increases when quid pro quo is the method used in grading employees. This harassment can come in different forms and can be as a result of race, gender or identity. Sometimes, quid pro quo becomes an avenue through which employees are manipulated.

The impact on team dynamics and corporate culture

With instances of harassment and discrimination, team dynamics are severely affected as well as corporate culture. It becomes harder for other employees to feel safe within the organisation. There is always the fear that benefits may be withheld if they do not meet certain standards. At the end of the day, this makes it harder for people to cooperate or work together as a team.

The effects of quid pro quo on organisational behaviour and communication

Open and honest communication is one of the key factors required to create a healthy workplace environment. This becomes difficult in an organisation where quid pro quo is viewed as a threat. It becomes difficult for employees to communicate their opinions for fear of being denied their bonuses or compensation as a result of unfair performance metrics.

 

The Alternatives to Quid Pro Quo

There are other corporate governance approaches that can be taken to workplace performance which can create a fair and equitable environment for workers. It’s harder to develop job satisfaction when you constantly feel like your compensations can be withheld on a whim. This is one of the ethical dilemmas surrounding the application of quid pro quo in the workplace.

As much as quid pro quo may be effective in business exchanges, the power dynamics involved in employer/employee relationships make it a tricky thing to navigate and implement satisfactorily while ensuring legal compliance.

Most of the time, it is better to focus on employee engagement and motivation to achieve the goals of an organisation. Employees are a lot more likely to devote their time towards achieving the company’s goals when they are aware that the company is concerned with their wellbeing as well.

Effective leadership has a very big role to play in the approach taken to improve workplace performance. This is why it is important to implement proper leadership development and talent management training for workers in leadership roles. This creates a flock of leaders more concerned with employee success and growth, creating a bigger opportunity for fairness and workplace diversity.

Quid pro quo isn’t the only way of creating equity in the workplace. It is easier to improve employee motivation when their benefits are not used as leverage against them. This is another area where proper leadership training comes in. Workplace cultures differ from company to company, hence, it is necessary to have leaders who are familiar with workplace dynamics and human relations.

The Benefits of Digital Coaching in the Workplace

The popularity of digital coaching is fast increasing in today’s business world. Company executives and personnel have begun applying it as a means of coming up with new HR practices to manage employees.

The diversity of the workplace environment calls for a new approach to employee management that takes the issue of fairness and equity more seriously.

The good thing about digital coaching is that it can be useful for both executives and team members, making it easier to come up with strategies that will be more effective in promoting diversity in the workplace. It also makes it possible to deal with the problem of harassment and discrimination in the workplace. This makes it possible for employees to feel comfortable enough to raise any complaints they may have about workplace culture.

Executives will also be equipped with the resources needed to manage the ever growing workforce and encourage employee engagement. This makes it possible to build a more efficient workplace culture focused on employee growth and development.

 

Conclusion

Quid pro quo creates an avenue for harassment and discrimination which can lead to a decrease in employee motivation. This affects the organisation negatively in the long run and can prevent the company from achieving its set goals.

However you look at it, there are always healthier ways of improving employee engagement. The advancement of technology has created innovations like digital coaching which make it possible for company heads to come up with better alternatives for employee engagement than quid pro quo.

To ensure diversity and promote employee satisfaction, it is advisable to look into these alternatives.

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Samuel Olawole
Samuel Olawole is a freelance copywriter and content writer who specializes in creating exciting content across a wide range of topics and industries. When he’s not writing, you can find him traveling or listening to good music.

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