Incentive programs usually work less effectively than we hoped, and sometimes less effectively than we believe. Rarely do we measure incentive effectiveness, and if we do, the measurement is problematic at best. Still, some practices related to incentives are probably counterproductive, and it's easy to find ways to improve. Here are some insights that might help improve incentive programs.
- Motivational power isn't proportional to market value
- We tend to ascribe a "motivational power" to incentives that's roughly proportional to the monetary value of the incentive. Generally, a trip to Hawaii is believed to have greater motivational power than an iPod.
- But motivational power isn't necessarily proportional to market value. For instance, an employee with a chronically ill child might not be able to take a trip to Hawaii — ever. Moreover, some incentives have emotional power but almost no economic value — like the Peabody Awards.
- Parallel incentive programs sometimes interact unfavorably
- Many incentive programs have parallel threads that interact outside our awareness. Interactions occur when people are eligible for more than one incentive. For instance, "if you win this, you can't win that." Some organizations have policies prohibiting sequential wins.
- These effects can demoralize. Winners of incentives from which others have been disqualified can feel that their awards have been cheapened. The resulting benefits the organization was hoping for might not materialize.
- Spacing recognition awards makes them more effective
- The effects of recognition awards don't accumulate, like say, money, because the effects of two awards are reduced when they occur close together.
- Recognition has powerful, positive impact. But for recognition events to be distinctive, leave some space between them.
- Let the work define award periods
- In many organizations, all awards have the same "period of performance," synchronized to the calendar or fiscal year. This practice increases the chances of interactions, and might not make sense for people assigned to longer-term projects that overlap years.
- Motivational power isn't
to market valueTry staggering the periods of performance to limit interactions, and to allow for equal recognition of contributors to long-duration projects.
- Incentives can actually have negative value
- Incentives can actually demotivate. For instance, designating only one "Engineer of the Year" or "Manager of the Year" can be demoralizing when, year after year, we must pass over many important contributors, who might see little prospect of justice ever being done. When some efforts are considered "primary" and others "secondary," the chances of winning awards for secondary activities are usually small, or they seem small to most employees.
- Summing the total effects of all demoralization, the "X Person of the Year" award might actually have a net negative effect on overall productivity.
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- Managing or responding to project risks is much easier when team culture encourages people to report problems and question any plans they have reason to doubt. Here are five examples that show how such encouragement helps to manage risk. Available here and by RSS on October 30.
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On 14 December 1911, four men led by Roald Amundsen reached the South Pole. Thirty-five days later, Robert F. Scott and four others followed. Amundsen had won the race to the pole. Amundsen's party returned to base on 26 January 1912. Scott's party perished. As historical drama, why this happened is interesting enough. But to organizational leaders, business analysts, project sponsors, and project managers, the story is fascinating. We'll use the history of this event to explore lessons in leadership and its application to organizational efforts. A fascinating and refreshing look at leadership from the vantage point of history. Read more about this program.
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44017: November 7,
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- Baldwin-Wallace University, 275 Eastland Road, Berea, Ohio 44017: November 7, Kerzner Lecture Series/International Project Management Day, sponsored by Baldwin Wallace University and the Northeast Ohio Chapter of the Project Management Institute. Register now.
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Many people who possess real organizational power have a characteristic demeanor. It's the way they project their presence. I call this the power affect. Some people — call them power pretenders — adopt the power affect well before they attain significant organizational power. Unfortunately for their colleagues, and for their organizations, power pretenders can attain organizational power out of proportion to their merit or abilities. Understanding the power affect is therefore important for anyone who aims to attain power, or anyone who works with power pretenders. Read more about this program.