Photo by seanmcgrath
A few unconnected sources connected in my mind in the last few days and made me think about an issue I attempt tackling from time to time – incentives. First off, we have a post by Paul Hebert commenting on the description of a research done by Pittsburgh’s Carnegie Mellon University Professor Denise Rousseau. On its face, Hebert says, the research suggests that providing rewards increases performance, even if they are unwarranted. However, Hebert doesn’t think so:
Providing “i-deals” – as they are referred to in the research – means the manager actually had to sit down and talk to the employee about what they valued and what they wanted. In other words, they had a conversation, were interested in the output from the employee and considered their needs and desires in the process of defining work tasks. The prime mover of performance isn’t the reward – it’s the conversation, the interest, the validation that what the employee does actually has impact on the company. Here’s the real test. Take the same amount of time spent figuring out the “i-deal” and spend it talking about the job, the impact, the way the employee does it, the roadblocks and the successes. In other words – talk about anything one-on-one with poorer performers and don’t offer any “i-deals.” I’m 100% certain you will get increased performance.
Take that idea connects wonderfully with what Ross Smith writes on the Management Exchange:
Does a paycheck, salary bonus, raise, or promotion put more work in to work? Well, it sure seems like lavish raises, exotic vacations, those coveted employee-of-the-month parking spots, and massive bonuses would make work more fun, doesn’t it? The research suggests otherwise: rewards, or worse, the threat of punishment actually make work less enjoyable and perhaps even reduce productivity. These extrinsic elements can make work feel like work.
People who are offered rewards tend to “…choose easier tasks, are less efficient in using the information available to solve novel problems, and tend to be answer oriented and more illogical in their problem solving strategies. They seem to work harder and produce activity, but the activity is of a lower quality, contains more errors, and is more stereotyped and less creative than the work of comparable non-rewarded subjects working on the same problem.”
Finally, look at some of the wonderful insight Barry Schwartz and Kenneth Sharpe provide in Practical Wisdom: The Right Way to Do the Right Thing:
There are two problems with incentives. First, they are often too blunt an instrument to get us what we need. In situations that call for scalpels, incentives are sledgehammers. Second, when incentives are introduced into a situation, they can undermine other, better motives to do the right thing. Different kinds of motives can compete, and financial or other material incentives often win the competition. The result, as we’ll see, is that such financial incentives can lead to demoralization—in two senses. First, they take the moral dimension out of our practices; second, they risk demoralizing the practitioners themselves.
In many situations, for many activities, no incentives are smart enough. Teachers like Deborah Ball and Mrs. Dewey spend their day figuring out how much time to spend with each student and how to tailor what they teach to each student’s particular strengths and weaknesses. They are continually balancing conflicting aims—to treat all students equally, to give the struggling students more time, to energize and inspire the gifted students. Along comes the incentive to bring up the school’s test scores, and all the nuance and subtlety of Mrs. Dewey’s moment-by-moment decisions go out the window. And what “smarter” incentive is going to replace judgment in making sensitive choices in a complex and changing context like a classroom?
And all of this made me think about incentives. In a way, the idea of incentivizing employee behavior means, to a certain degree, that the creator of the incentives knows what is the right behavior. Management, if you will, has the rule book that says how one needs to behave in every situation and thus is able to “reward” for compliance. And for those of you that this reminds something it should. This arrogant “management knows all” approach is the foundation of Frederick Winslow Taylor’s Scientific Management.
In western culture the search for one truth is as old as philosophy. This thinking has penetrated into our business culture. However, there isn’t one truth that can explain the complexity of this world and the diversity of the people. It is time to recognize that ideas like Equifinality, differences and redundancies are valid business tools that can be used to reach business goals, just as much as the “one truth” idea. And while one answer/one way/standardization/rule book/Scientific Management mentality has its upside in some environments, I think we are starting to find out that it has major flaws and that it might not work in our own world today.
Incentives are will and continue to be an important part in people’s behavior and decision-making. They will also continue to be an important tool for business and management. But their reign as “supreme all knowing leaders” of workplace motivation needs to change. Our goal as managers is not to find the right incentives. Our goal is to create an environment where we do not need incentives at all. As Hebert says, one way to start on that path is by having actual conversations with employees.