Performance requires incentives
Chancellor Friedrich Merz has promised an „autumn of reforms“. The grim labour market data underlines how urgently Germany needs stronger growth. For the first time in more than a decade, the number of unemployed has climbed above 3 million. A turnaround will require an expanding economy – something policymakers can neither legislate into being nor sustain indefinitely through public spending. What they can influence are the framework conditions. Yet before that comes a fundamental question: what role should performance play in our society? After all, economics is competition, and the willingness to perform is a prerequisite for any success.
Positive motivation needed
There are various ways to strengthen people’s motivation to perform. In Germany, the debate often centers on sanctioning those deemed unwilling to work. From a fairness perspective, that may have its place. But overall readiness to perform is far more likely to increase through positive incentives. A glance at sports makes the point: no athlete has ever succeeded because a guilty conscience forced them into training. Without inner drive, nothing works. The „autumn of reforms“ should therefore focus on fostering self-motivation – at all stages of life.
The market can curb abuse
Take schools as an example: instead of keeping grades under wraps or scrapping them altogether, why not reward students who help their weaker peers – perhaps through playful competitions between classes or schools? After graduation, young people might move on to military or civilian service. Those who voluntarily serve their country should be rewarded with generous incentives, such as start-up capital for their training or education. Employees or retirees, in turn, could be encouraged to take on volunteer work through tax benefits or similar measures.
Performance should also pay off on the job – not just for managers with lavish bonus agreements. Why shouldn’t companies be allowed to grant each employee a capped, performance-based bonus of a few thousand euros tax-free? Abuse would be curbed by the market itself. An employer who hands out such bonuses only to favoured colleagues will quickly lose the true performers.
