Motivation, Rewards, Performance Appraisals and Your Career

In this interview Dan Pink again makes some great points relating to psychology, managing people and managing your career.

Q. What kinds of programs can managers and companies put into place to motivate their workforce?

Assuming companies are paying people fairly, they should do what they can to foster autonomy, mastery, and purpose. One of my favorite specific ideas is this: The Australian company Atlassian conducts what they call “FedEx Days” in which people work on anything they want for 24 hours and then show the results to the company the following day. These one-day bursts of autonomy have produced a whole array of fixes for existing products, ideas for new ones, and improvements to internal processes that would have otherwise never emerged. For creative tasks, the best approach is often just to hire great people and get out of their way.

I agree. Focusing on motivation is wrong, as Douglas McGregor detailed in the Human Side of Enterprise over 50 years ago. The problems with theory x management (motivation through fear and rewards) has been detailed over and over again decade after decade. I get tired of us ignoring very well done work to help us manage better for decades 🙁

Q. Are you suggesting that offering someone a 50 per cent raise won’t motivate him or her to work harder?

…most organizations dangle what I call “if-then” rewards — as in, “If you do this, then you get that” — bonuses, commissions, and like. Fifty years of social science tells us that “if-then” rewards are great for simple, routine, algorithmic work [but not creative work]… The best use of money as a motivator is to hire great people and then pay them enough to take the issue of money off the table.

By the way, even that juicy, non-contingent 50 per cent raise has some serious limits. People will be thrilled in the short-run, but over the long term (say, the third paycheck) the thrill will become the status quo…

Again I agree: When Performance-related Pay Backfires, Righter Incentivization, Build an Environment Where Intrinsic Motivation Flourishes.

Traditional performance reviews have passed their sell-by date. Big time. There’s research showing that roughly two-thirds of performance appraisals have either no effect — or a negative effect! — on employee performance. That said, making progress in one’s work is enormously motivating, as Harvard’s Teresa Amabile has shown. And the only way to make progress is to get feedback on your performance. But giving people that feedback once a year — and in an awkward, kabuki theater-style meeting with their boss — is a joke.

Again I agree: W. Edwards Deming and Peter Scholtes on performance appraisal.

That means America will have to reckon with some seriously outdated systems. For instance, even after Obama’s health care reform, it’s still considered the norm to get health insurance from an employer. Yet there’s very little economic or moral logic behind that approach.

Once again he has it right. And he uses the right words. The problem is our health care system is a huge failure (the cost is double what other rich countries pay for equivalent outcomes before you factor in emotional stress of tens of millions without health care coverage and struggles/worries dealing with insurance companies). Tons of people are putting forth their best efforts. But as Dr. Deming said, doing that in a system that is broken is not a recipe for good results.

If the ball-bearing manufacturing system were equally bad it really wouldn’t matter much. Sure the economic costs would still exist but health care encompasses 18% of the USA economy and has probably the highest impact on people’s well being. Having that system broken is likely the worst possible system in your economy to have broken.

Q. So how do we turn our careers into our passions?

You know, I’m not a huge fan of the concept of “passion” when it comes to careers. Instead of trying to answer the daunting question of “What’s your passion?” it’s better simply to watch what you do when you’ve got time of your own and nobody’s looking. That will give you the deepest insights into what you should be doing with your life.

I think he is onto something here. This is one of the larger challenges I see. My father actually loved what he did. I find that to be fairly rare though. Finding the balance between doing what you love and what is economically viable given your society and your desired level of free time, goods and services is not easy. Then looking long term just adds more complications – knowing what level of pain now is worth it for future benefit is not easy.

Looking at the fairly small number of people that daringly just threw caution to the wind and followed their dreams and succeeded is not necessarily a wise idea, in my opinion. There are risks and potential rewards to balance. For some people the idea of a decent chance at going broke is not a big concern, they figure they will make do. For others that is not an acceptable risk. I do believe we have to pay attention to finding a career that brings up the best life it can. For me that view has a career inside a larger system of your life. It is a very large part of your life. But optimizing the career at the expense of the overall system is not wise.

Related: Incentivizing Behavior Doesn’t Improve ResultsAnnual Performance Reviews Are Obsolete

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  1. Pingback: Psychology – Managing Human Systems « The W. Edwards Deming Institute Blog

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