Universities typically employ new academic staff on contracts which specify that after a number of years subject to performance a subset of the junior faculty members is given a promotion That promotion usually consists of a raise and tenure Criticall

3117). The study focuses on how the universities design motivation plan for their employees and the consequences of such motivation plans. Although employee’s motivation is meant to increase performance of the organization, poorly designed compensation plan may discourage some workers and result to decline in the overall performance of the workers.
London (1995, p.37), uses tournament theory to elaborate how the size of the prize, players’ chances of winning the prizes and the cost of players’ effort to implement the undertaking influences the achievement of the players’ objectives and performance of the game. In the first incentive the prize for the players was independent of the outcome of performance, the second incentive involved single large prize for the first winner only while in the third category, there were different prizes for different winners and this depended on individual performance. The result of this game depicted that the workers’ output was maximum when there are various prizes for different winners (Dohmen &amp. Falk, 2010. P.152). A few people had an incentive to pursue the prize when a single large prize is offered while the performance was lowest when the performance had no effect on the individual earning. The tournament theory has two main challenges which include competition among the participants or sabotage of the effort.
From the game theory, the productivity of the workers is greater if the incentive scheme gives all employees equal chance of sharing revenue of the organization (Nalbantian &amp. Schotter, 1997, p. 3119). The players’ effort is dependent on the expected prizes, the effort involved in scooping the reward and the probability of winning the game. The effort of the participants is at maximum where the probability of winning or losing the game is balanced. Therefore, in a university set-up where the employees are hired on contract with hope of getting a