Wacky Words of Wisdom: IV

Some of what's widely believed about managing people is often right. But some is worse than worthless. We're actually better off ignoring it. Here's a fourth installment of adages and beliefs that sound like common sense, but which are actually untrue or massively misapplied. See "Wacky Words of Wisdom," Point Lookout for July 14, 2010, for Part I and links to others.

You get what you pay for

Many believe that for any given individual, and any desired behavior, we can structure money-based incentives that effectively elicit the behavior. That is a false belief.

Numerous studies have demonstrated the falsity of this belief. [Kamenica 2012] Even if such an incentive program did exist, it could be effective only with accurate communication of the program to the target individuals. And we all know how unreliable communication can be.

Punishment deters bad behavior

This belief is the inverse of the monetary incentives idea. It holds that disincentives can deter employees from any specific undesirable behavior. It's also a false belief. Although disincentives can deter some people from some behaviors, we overestimate the effectiveness of disincentives, and we often overlook their negative side effects.

Research has demonstrated the shortcomings of disincentives. [Eschleman 2014] Moreover, the effectiveness of disincentives in deterring others is limited by communications constraints arising from regulations designed to protect the privacy of individuals who have been disciplined or terminated.

People make choices on the basis of rational self-interest

This belief is at the heart of claims that incentives and disincentives are effective. The effectiveness of incentives and disincentives depends on people making rational choices after being informed of them.

In 2002, Daniel Kahneman, an Israeli-American psychologist, was awarded the Nobel Prize in economics for foundational work he carried out jointly with Amos Tversky, who was deceased at the time of the award (the Prize is not awarded posthumously). Kahneman and Tversky demonstrated that people don't always choose rationally; indeed, in some classes of situations, they rarely choose rationally. Among other mechanisms, cognitive biases account for many of these phenomena.

Whatever you're trying to do, teams do it best

At every Some of what we believe is worse
than worthless. We're actually
better off ignoring it.size scale, enterprises have reorganized themselves around teams. Teams are effective for some things, but not everything, and not in every setting. [Bacal 2015] Probably the next level of sophistication about teamwork will involve knowing when not to organize as teams.

Writing is an example. If documents can be segmented, then teams (actually groups of individuals) can write them faster and better. But when we need consistency of style and content, single authors do best. And so it is with much else that people are now trying to do in teams. Study the work you do as teams and ask "How is (or maybe, 'Is') the team structure helping?"

Although much of what we do believe actually is valid most of the time, very little is universally true. Examine your beliefs carefully.   First issue in this series   Top    Next Issue

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For more examples, see "Wacky Words of Wisdom," Point Lookout for July 14, 2010, "Wacky Words of Wisdom: II," Point Lookout for June 6, 2012, "Wacky Words of Wisdom: III," Point Lookout for July 11, 2012, "Wacky Words of Wisdom: V," Point Lookout for May 25, 2016, and "Wacky Words of Wisdom: VI," Point Lookout for November 28, 2018.

Footnotes

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A cognitive bias known as the Overconfidence Effect causes us to overestimate the reliability of our judgments. Decisions we make based on those judgments are therefore suspect. But there are steps we can take to make our confidence levels more realistic, and thus make our decisions more reliable. Available here and by RSS on May 14.

And on May 21: Mismanaging Project Managers

Most organizations hold project managers accountable for project performance. But they don't grant those project managers control of needed resources. Nor do they hold project sponsors or other senior managers accountable for the consequences of their actions when they interfere with project work. Here's a catalog of behaviors worth looking at. Available here and by RSS on May 21.

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