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.
Are your projects always (or almost always) late and over budget? Are your project teams plagued by turnover, burnout, and high defect rates? Turn your culture around. Read 52 Tips for Leaders of Project-Oriented Organizations, filled with tips and techniques for organizational leaders. Order Now!
Your comments are welcomeWould you like to see your comments posted here? rbrenmhXARWRMUvVyOdHlner@ChacxgDmtwOKrxnripPCoCanyon.comSend me your comments by email, or by Web form.
About Point Lookout
Thank you for reading this article. I hope you enjoyed it and found it useful, and that you'll consider recommending it to a friend.
Support Point Lookout by joining the Friends of Point Lookout, as an individual or as an organization.
Do you face a complex interpersonal situation? Send it in, anonymously if you like, and I'll give you my two cents.
More articles on Personal, Team, and Organizational Effectiveness:
- Take Any Seat: II
- In meetings, where you sit in the room influences your effectiveness, both in the formal part of the
meeting and in the milling-abouts that occur around breaks. You can take any seat, but if you make your
choice strategically, you can better maintain your autonomy and power.
- Changing the Subject: II
- Sometimes, in conversation, we must change the subject, but we also do it to dominate, manipulate, or
assert power. Subject changing — and controlling its use — can be important political skills.
- Guidelines for Delegation
- Mastering the art of delegation can increase your productivity, and help to develop the skills of the
people you lead or manage. And it makes them better delegators, too. Here are some guidelines for delegation.
- Creating Toxic Conflict: I
- Many managers seem to operate as if their primary goal is to create toxic conflict among their subordinates.
Here's a collection of methods for sowing toxic conflict that can help bad managers become worse managers.
- Issues-Only Team Meetings
- Time spent in regular meetings is productive to the extent that it moves the team closer to its objectives.
Because uncovering and clarifying issues is more productive than distributing information or listening
to status reports, issues-only team meetings focus energy where it will help most.
See also Personal, Team, and Organizational Effectiveness for more related articles.
Forthcoming issues of Point Lookout
- Coming August 28: Playing at Work
- Eight hours a day — usually more — of meetings, phone calls, reading and writing email and text messages, briefing others or being briefed, is enough to drive anyone around the bend. To re-energize, to clarify one's perspective, and to restore creative capacity, play is essential. Play at work, I mean. Available here and by RSS on August 28.
- And on September 4: How Messages Get Mixed
- Although most authors of mixed messages don't intend to be confusing, message mixing does happen. One of the most fascinating mixing mechanisms occurs in the mind of the recipient of the message. Available here and by RSS on September 4.
I offer email and telephone coaching at both corporate and individual rates. Contact Rick for details at rbrenmhXARWRMUvVyOdHlner@ChacxgDmtwOKrxnripPCoCanyon.com or (650) 787-6475, or toll-free in the continental US at (866) 378-5470.
Get the ebook!
Past issues of Point Lookout are available in six ebooks:
- Get 2001-2 in Geese Don't Land on Twigs (PDF, )
- Get 2003-4 in Why Dogs Wag (PDF, )
- Get 2005-6 in Loopy Things We Do (PDF, )
- Get 2007-8 in Things We Believe That Maybe Aren't So True (PDF, )
- Get 2009-10 in The Questions Not Asked (PDF, )
- Get all of the first twelve years (2001-2012) in The Collected Issues of Point Lookout (PDF, )
Are you a writer, editor or publisher on deadline? Are you looking for an article that will get people talking and get compliments flying your way? You can have 500 words in your inbox in one hour. License any article from this Web site. More info
- The Race to the South Pole: Lessons in Leadership
- 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. Here's a date for this program:
- 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.
- 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.
- The Power Affect: How We Express Our Personal Power
- 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.