Tag Archives: Douglas McGregor

Righter Incentivization

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

the problem with using money as a motivator is that it is very difficult to get the incentive system designed so it motivates the right kind of behavior and discourages the wrong kind

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 ManagementAnother Quota Failure ExampleRighter Performance Appraisal

Who Influences Your Thinking?

Comments on Who Influences Your Thinking? [broken link removed] – Survey results [broken link removed]

> 1. Are people getting most of their information
> from other sources?
That would be my guess.

Similar to the phenomenon of “the long tail” which is an interesting topic in its own right. We tend to focus on the popular few (books, musicians, movies, authors, computer programs…) but often the sum of the less popular many is more significant. See:

  • The Long Tail, by Chris Anderson, Wired, Oct 2004 “The average Barnes & Noble carries 130,000 titles. Yet more than half of Amazon’s book sales come from outside its top 130,000 titles. Consider the implication: If the Amazon statistics are any guide, the market for books that are not even sold in the average bookstore is larger than the market for those that are”
  • Continued discussion of the Amazon figures in a Chiris Anderson’s blog. “I’ve now spoken to Jeff Bezos (and others) about this. He doesn’t have a hard figure for the percentage of sales of products not available offline, but reckons that it’s closer to 25-30%.”
  • The long tail – a secret sauce for companies like Amazon.com, Netflix and Apple Computer, Motley Fool, NPR Audio Recording

Getting back to the question raised by the “Who Influences Your Thinking” post; More importantly I believe they (we) are just failing to get all we should.
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