Internal motivation, conversations, incentives and Equifinality

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.


10 Responses to “Internal motivation, conversations, incentives and Equifinality”

  1. Says:

    Great thought combination here…
    Your definitely connecting the dots…
    I love connecting the dots so I think I’m going to give you a long response!

    ” 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.” * I agree 150%…

    I’m going to take this a little further. What happened to the job where the employee was rewarded annually? I mean really rewarded… Not the basic 3% and below… I mean rewarding each employee truthfully for the work they did all year. Because I can personally tell you I haven’t nor has hubby seen this since before the 1990′s recession. The current reward system for employees emerged from that time… I think it may have worked during previous hard financial times but it should have been a temporary means to meet the financial atmosphere while keeping employees engaged. Yet when the economy turned upward it was left in place… Why? It saved money. So my first thought is why do all the savings have to come at the employee level? Upper management returned to receive great bonuses… Even outrageous bonuses… While many employees at these companies received 0% and no reward for their hard work… We have lost the balance… Then companies want to know why unions are infiltrating the workforce… Was our original compensation framework broken? In my humble opinion NO. I think it was changed due to economic demands and kept in place instead of addressing another underlying situation… Bias… This ultimately rests with management… When our economy returned to upward movement why didn’t we return the %’s to employees. It was cheaper & the reward systems created to engage employees were better controlled by management… In essence they rewarded who they wanted to reward… We have evaded fine tuning management by creating more and more elaborate reward systems… Has it changed the picture at all? Haven’t we just hedged the system? Well now the time has come to pay up! The only way to fix the problem is to step up and really look at it! We need all our employees not just the “favorites” (who many times are unproductive)… We need that original framework for annual evaluations… At one time I remember being able to get up to a 20% increase in salary… Granite I was not making that much at the time but it still existed… When things improved it never returned… But we can no longer afford to put this power in the hands of one person…

    “In many situations, for many activities, no incentives are smart enough.” *Again I agree 150%…

    I believe proper compensation does not require a fix by creating reward programs… In my humble opinion a reward program is just that a quick fix to flawed compensation. I’d like to say annual raises are not important but that would be plain stupid to think an employee will invest in your company if you refuse to invest in your employee. Reward programs do not fill the gaps in our current system and has proven time & times again to be counter productive… Rewards are offered from commitment avoiding organizations wishing to avert long term $$ commitments. These reward systems have also been accompanied by a non relationship mind set. Why? It doesn’t take a genius to figure this one out… How much will you care about someone being short changed if you have no relationship with them? I think this answers itself…
    Now I don’t want to discount any employee of the month program because most ppl feel this to be a special designation and it should be… But with so many programs in existence it has sadly become uneventful.

    I can empathize with Deborah Ball and Mrs. Dewey… The education system is the perfect example to use here. I raised a child with a learning disability and for 16 yrs was involved with her annual IEP (independent education program) creation. Again, this is just an example. Myself, her teachers, and special ed specialist created a plan each year to develop her skills… It takes time, it required an immediate picture of my daughters abilities and an ever progressing picture of her future abilities and limitations… It changes each year with her growth or lack of improvement. My point here is sometimes we took a step back… In my experience when this happened it was not my childs fault but something lacking in the development or implementation of her plan… Should I punish her for not reaching goals that I set for her? With maybe a 0% on the scale of judgement? At this point I would have to ask myself what went wrong… Did I set the wrong goals, did we address the wrong weakness/strength, were the requirements of her plan met by staff/myself, is it a relationship misfit, are there other emotional issues such as family issues, did everyone fulfill their obligations? I am very thorough in my evaluation of these situations because I am responsible for her development or lack of. It is my obligation as a parent to see that she reaches or surpasses her potential. So if I find out a teacher (only an example) has not been giving her specific training as agreed I don’t want to hear about a budget issues “period”. If we sit down as a team to facilitate an IEP and you renege on your agreement then you hinder any future agreements/progress. In essence this is a separate issue that cannot in any way become part of my childs IEP it must be removed from the process. If the issues become entwined with the overall process we will never progress. We are all human and in this type of situation trust has been lost but it should not hinder further progress. It’s important to recognize that this teacher could have learned a hard lesson and will honor all future agreements. It could also be that this teacher will always operate in this manor. If we make an objective decision we would not include her in this childs IEP team, and further monitor her future dealings. Again it is important that a process be in place to handle these situations and if not one should be put in place. Then as a team we must return to the IEP and recreate our goals from a completely different beginning. We cannot just use the old agreement because the situation has changed we must start at the beginning.
    It could also be a family related situation that we can address as a team. Our home environment is very important to our success in any endeavor therefor to discount it’s importance is foolish. It could be a death in the family (just an example). In this case it should be considered in the overall planning… This would bring in specific accommodations for loss of time/attendance and what could be done to compensate for this loss of time. It could be a health condition that requires a 20 minute brake mid afternoon. There are always options when everyone’s goals are improvement… There are always ways around obstacles we only need to look. However if we simply ignore an issue we have failed to fully engage.
    Ok, my long winded point, don’t you think we should consider those who are creating and implementing these annual reviews? Who monitors the process here? Have we simply created lots of departments with people doing nothing but referring you to the next. Who is responsible? I find my greatest difficulty is getting to that person… In fact most people are not as persistent as I am and ultimately give up on finding that person/department. Have we created this to avoid responsibility? When you refer someone to another do you follow up to see if they resolved the issue? Most of us don’t…
    I will add one more thought here, surveys are not doing it… If your organization is that large that you need to survey your employees then you need an outside “unaffiliated in any way” agency to conduct one on ones with employees of their choosing. Call it engagement audit… But we should be prepared to listen to the results…
    My example above was my daughter because I find such similarities in the evading process… Some may say you can’t compare because a child is to personal… What else is more personal than how we perform our everyday jobs? I find it is one of the most important reflections of an individual that you can get and not many as personal. I have never met anyone who did not want to become better at what they do for a living. Even among less ambitious individuals I have always found that most ppl want to be proud of their performance as an employee. So just as the old school teachers say “every child is reachable”, I say every employee is reachable… To do this however will require adjustments or we can just keep hedging along.

    PS Sorry about posting to the wrong pg

  2. Paul Hebert Says:

    Great post Elad.

    However, I don’t think I share the same goal of creating an environment where we “do not need incentives at all.”

    Markets change, people change, systems change, products change. And because of those changes behavior needs to change as well. Being human – we thrive on change but dislike the discomfort it brings. Incentive ease that discomfort and create a reason to put up with it. It balances the discomfort making changing behavior “neutral” (IMHO).

    I don’t foresee any future where we won’t want to use incentives to guide behaviors. I do hope we see a future where badly designed incentives drive too much of one behavior (typically a bad one) over another.

    Incentives also provide a much needed “break in the action” creating excitement and surprise – without which I fear we end up bored and disconnected.

    While I think there is a better way to do the baseline of employee engagement using the tools you outlined. I don’t see that incentives should go the way of buggy whips. People are people – have been for 500,000 years and many of the things that drive our behavior back then – drive it now. Incentives are one of those things.

  3. sherfelad Says:

    As usual, you put too many good points for me to take all of it in. I think your comment complements mine wonderfully. Those are great questions we should be asking ourselves as managers. Thank you so much for sharing and engaging. I know it keeps me motivated to keep on writing…

  4. sherfelad Says:

    I am so happy to see you liked your post and took the time to engage and give your thoughts. I don’t think our approaches differ that much. As you write so wonderfully in your own blog all the time we need to remember that incentives and rewards are just tools. Focusing on them is important but it should not take us from the main goal which is a business that is made by and for people.
    Yes, as I wrote in my post as well, incentives will probably always be a tool and an important one and we should understand them and use them for the best. I think we can both agree that they should not be the end but the means.
    Truly hope to see more of your comments here.

  5. Says:

    I can remember a time when we had an annual review that was a very good incentive… It was possible to achieve up to 20% of an increase & learn new skills. I can remember at one company they did all annual reviews one day of the week because it consisted of a meeting with several supervisors to provide input (constructive input) then your department manager along w/ your immediate supervisor finished the review. These reviews were prepared around the employee & properly constructed. Everyone who signed off on the review was responsible for its outcome (something greatly missing today). I’m sure it took time to provide employees with this system but I can assure you it was an exception for employees to be unhappy. When I say this I mean the employees really were happy with their jobs and we always had supports needed to reach our goals. I can assure you when someone got that review they were excited in anticipation of receiving it. One persons excitement can put a spark in the day/week of an entire department. If the review is conducted from a professional level it can create a great atmosphere to work in. In my humble opinion I think our compensation programs can include various incentives that are guaranteed to everyone. This seems to be avoided at all costs… Why? Don’t companies monitor their compensation system? Do companies monitor reward programs in the same manor as the compensation system? Have these reward programs been offered to benefit employees or managers? If a manager conducts themselves as intended while conducting an employee review & a company provides the proper tools can’t they keep an employee engaged?
    With all due respect I feel these reward programs along with a weak compensation system have created/encouraged managers that don’t have to do their job and many times are not qualified. Unfortunetly for companies & managers the employees are still driven by that review process. Like it or not the annual review is as personal as it can get with your employee. I have never heard an employee get upset about a company ending a specific reward program but I have heard plenty about the lack of incentive within a compensation system. Think about it, when you hear about labor issues what are they about? Have you ever truly heard what employees think about these reward programs and what they represent to them? I can personally tell you as an example while working for several companies with these programs the employees all felt they were a joke. Give them that properly constructed review to include a proper incentive and your a hero! So when things are bad in the economy they will be much more understanding of “temperary” cut backs.


  6. Paul Hebert Says:

    Anne… hate the player, not the game.

    I agree 1000% with everything you said… but… because you’ve been places and talked with people that have been in a company with poorly designed reward strategies and tactics doesn’t mean the tool is bad – it means the application was bad. You don’t stop using a hammer because it doesn’t work well on nuts and bolts. You get a wrench. Same goes for incentives. When used inappropriately they are a bad thing – and very damaging.

    Everything you said is the result of bad managers – not bad incentive programs. Programs designed correctly influence behavior correctly.

    I’d also submit that an annual performance review process (no matter how well done) is one the main culprits that keep companies from realizing their true potential. Business moves too fast for annual reviews. We need to be talking, engaging, directly, supporting, training and helping our employees daily, weekly, quarterly, etc.

    To me – annual reviews along with service anniversary programs are dinosaurs. And I think you’ll see them disappear in the next 5-10 years.

  7. Vanessa Says:

    It is really true the difference it can make when you actually can have a conversation with your manager as a way to change things at work. I remember my first job, the pay was crap but we had a great team and going to work each day felt like fun and even though we were only selling ice cream, we enjoyed… a job well done, making customers happy. My next job, I made more but hated it. Incentives really don’t make an unpleasant work experience any better, so it’s harder to be motivated, even with the money (because the joy of the added money fades after a while). By the way, what page is the story about the two teachers Ms. Ball and Mrs. Dewey on in Practical Wisdom?

  8. sherfelad Says:

    Hey Vanessa,
    Thank you for your prescriptive. I think what you are describing is consistent with many people experience.
    I read the book on the kindle so I only have the kindle location: 2501-6.
    Hope this helps.
    Thanks for engaging.

  9. Vanessa Says:

    Thanks Elad,

    I had wanted to flip through the book in a bookstore but I did not think of Kindle. Maybe I will try that because Kindle has an app too🙂. Practical Wisdom seems like a very interesting book! Thank you for writing about it.

  10. sherfelad Says:

    My pleasure!

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