Incentive schemes to get people “motivated” often backfire. Why can’t we figure out how to incentivize the behavior we desire and have it not backfire on us? What is the righter way to dangle incentives in front of our employees to get them to do what we want? Well aiming at that is a bad strategy. Using extrinsic motivation less badly is possible but the correct answer is just don’t do it.
The problems of individual incentives seem to far outweigh any potential benefit. Dr. Deming was against this strategy decades ago, and I agree. Peter Scholtes and Alfie Kohn (among others) do a good job of explaining why it is a bad idea. Douglas McGregor‘s Human Side of Enterprise is a good place to start. Managers need to eliminate de-motivators of employees not try to find better carrot dangling schemes to somehow make the carrot dangling incentive produce the desired behavior.
I have written about this area previously: Problems with Bonuses, The Defect Black Market, Why Extrinsic Motivation Fails and Losses Covered Up to Protect Bonuses.
Bob Sutton has a good blog and wrote an interesting post recently: Washington Mutual and Perverse Incentives
their reward system — and misguided culture to supported it — helped bring down this once great bank [WaMU]
My question: Problems like this crop up over and over again. What can we do to stop them? Should we stop using individual incentives? I think that is too extreme, but how do we design individual incentive systems that avert a narrow and misguided focus?
I would say don’t try to create righter individual incentives. While it is possible to make it less bad, spend your time on more productive management activities. That is my answer.
Related: Reward and Incentive Programs are Ineffective — Even Harmful by Peter Scholtes – Theory X (motivation by carrot and stick) – We eliminated commissions, incentives… – Individual Bonuses Are Bad Management – Another Quota Failure Example – Righter Performance Appraisal
I couldn’t agree more about “saying no” to individual incentives. But I also recognize how difficult this is to actually do within the vast majority of companies.
It always amazes me how HR departments feel the best approach is to “standardize” performance management, review, incentives, etc. Really isn’t that different from a lot of the problems with schools.
Highly recommend Alfie Kohn’s books/articles for explaining the details.
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