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? rbrenZLkFdSHmlHvCaSsuner@ChacbnsTPttsdDaRAswloCanyon.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:
- Diagonal Collaborations: Dazzling or Dangerous?
- Collaborations can be very productive. There are some traps though, especially when the collaborators
are of different rank, with the partner of lower rank reporting to a peer of the other. Here are some
tips for preventing conflict in diagonal collaborations.
- At the Sound of the Tone, Hang Up
- When the phone rings, do you drop whatever you're doing to answer it? Do you interrupt face-to-face
conversations with live people to respond to the jerk of your cellular leash? Listen to seemingly endless
queues of voicemail messages? Here are some reminders of the choices we sometimes forget we have.
- Give It Your All
- If you have the time and resources to read this, you probably have a pretty good situation, or you have
what it takes to be looking for one. In many ways, you're one of the fortunate few. Are you making the
most of the wonderful things you have? Are you giving it your all?
- Discussion Distractions: I
- Meetings could be far more productive, if only we could learn to recognize and prevent the distractions
that lead us off topic and into the woods. Here is Part I of a small catalog of distractions frequently
seen in meetings.
- Workplace Memes
- Some patterns of workplace society reduce organizational effectiveness in ways that often escape our
notice. Here are four examples.
See also Personal, Team, and Organizational Effectiveness for more related articles.
Forthcoming issues of Point Lookout
- Coming February 8: Kerfuffles That Seem Like Something More
- Much of what we regard as political conflict is a series of squabbles commonly called kerfuffles. They captivate us while they're underway, but after a month or two they're forgotten. Why do they happen? Why do they persist? Available here and by RSS on February 8.
- And on February 15: Four Razors for Organizational Behavior
- Deviant organizational behavior can harm the people and the organization. In choosing responses, we consider what drives the perpetrators. Considering Malice, Incompetence, Ignorance, and Greed, we can devise four guidelines for making these choices. Available here and by RSS on February 15.
I offer email and telephone coaching at both corporate and individual rates. Contact Rick for details at rbrenZLkFdSHmlHvCaSsuner@ChacbnsTPttsdDaRAswloCanyon.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 500-1000 words in your inbox in one hour. License any article from this Web site. More info