Don’t over cook your carrot!

I came across this really interesting article (via @ManageU) about Building a Better Carrot with tips on how to design better compensation systems in times when budgets are tight. There are some great examples on here of organisations using inventive incentives to boost productivity of staff and reports of them working – steak dinners, peers driven cash awards, celebratory parties.

But, at the risk of sounding like one of the “eye rollers” that Rutzick refers to, I think it’s important to treat this advice with caution…

Steak dinners only work for so long. If you introduce the concept that people will be rewarded for meeting their targets that fast becomes the only reason that they do so. What happens if budgets are cut so steak dinners aren’t on the menu any more (bad pun, I know!) – your staff will no longer have any reason to reach their targets. If targets weren’t being reached in the first place the reward is not the problem, there must be another reason.

I was alarmed at the example of the lawyers being given an extra $75 for each case completed above target. They said that “some of the guys worked nights and weekends to get the extra money and some didn’t” – for the people who are working all of these extra hours you are risking burn-out and mistakes, and for those that aren’t it is inherently unfair. What if one lawyer had a small child so couldn’t do the extra hours? It creates stress and competition and, in the long term, could lead to a reduction in productivity. With a target like this, how do you know that you are getting quality case management and not just keeping the numbers up?

That said, the examples of feedback are spot on for me. Empiorical research has shown that creating an environment where employees recieve feedback on how they’re getting on, helping them to feel that they are making a contribution, really works. This is particularly true when the feedback is unexpected.

The example in the article of Joan Klein, who received some silk flowers as a thank you from a manager for running some training for her, is a great example of how reward can work. Giving someone an unexpected reward – when it’s a thank you, box of chocolates or envelope of cash – will give them a boost in motivation without tying their motivation to the reward. As Klein says, she would run the training again but she wouldn’t be doing it for the reward (because she doesn’t expect one), she would do it because she wants to!

My advice is this – if your staff aren’t meeting their targets don’t throw money at them to fix the problem, find out what the problem is. Are the targets too tough? Do they care about what they’re doing? If you want to recognise people going the extra mile give them a one-off, unexpected reward – it can be cash, a present, time off, training. Just make it meaningful.

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