Incentives

Motivation via Incentives

Money is not the most important thing in the world, love is. Unfortunately, people have started loving money.

5As of Motivation  (1) Appreciation, (2) Authority, (3) Avoiding Pain (internal to self) (4) Affluence and (5) Association. And the 9 tactics around the “5As” that lead to self / others motivation being (1) Recognition, (2) Trust, (3) Challenge, (4) Direction and Communication, (5) Opportunity, (6) Personal Stake, (7) Freedom of Choice, (8) Incentive and (9) Association with a team or group.

We have discussed recognition, and how it is used to tame killer whales http://hunt-for-motivation.blogspot.com/2011/01/rrecognition-can-tame-killer-whale-why.html

Trust as a motivator http://hunt-for-motivation.blogspot.com/2011/01/people-respond-to-trust-by-upholding-it.html

Challenge as a motivator http://hunt-for-motivation.blogspot.com/2011/01/life-challenges-help-us-discover.html

Direction and Communication as a motivator http://hunt-for-motivation.blogspot.com/2011/01/efforts-and-courage-are-not-enough.htmllogspot.com/2011/01/efforts-and-courage-are-not-enough.html

And Association as a motivator http://hunt-for-motivation.blogspot.com/2011/02/camaraderie.html

Today lets discuss Incentives as a motivator. Before we start, let me clarify that I do not recommend using monitory incentives to motivate people, although I do acknowledge  that monetary incentives work wonders in motivating people, but it is only short term.

Incentives = additional remuneration in recognition of goal achievement.

Why do incentives work. In this day and age, Money has become very important, while personal values have lost importance. 25+ years ago, friendships were made on values and common ground, now, friendships are made on business interest. Unluckily,  Money is seen as the tool that will help satisfy social needs, psychological needs, security needs and Esteem needs. In essence, Money is a tool that is applicable throughout the Maslow’s Hierarchy of needs (below).

Unluckily, Only a few men have the ability to withstand the highest bidder

Why I do not recommend using incentives as a motivator. I acknowledge that in the short term, incentives do wonder, given money is possessing most peoples imagination. However, in the long term, incentives have a negative impact as it becomes term of business. Gist being, that in the short term, incentives improve your bargaining position, however, its not a long term strategy.

 Let me give you a hypothetical example, imagine your team is under delivery pressure of a project. It seems that the project will not be delivered on time. So you tell everybody that ½ salary will be given, if the project is delivered on time. And low and behold, you see your team stretching their limits, working nights even weekends. And the project does get delivered on time. Now imagine, what is your team exited about after the project delivery. MONEY and not that they stretched themselves to deliver the project to deliver on company mission / vision.  After a few weeks you will realize that your people will start hinting on incentives program to deliver i.e. it becomes term of business.  Once we reach this stage, its very hard to get out. Because, now I expect to be paid extra for stretching myself.  Continuing with the hypothetical situation, assume that you give-in to your employees demand and start an incentive program. Now you will realize that you have many disgruntled employees. People outside your department will be dissatisfied because they can not be part of this incentive scheme. While people in your department will be dissatisfied, because they will feel that person X has easy targets vs. them. Hence they will feel that you are not doing justice. In the end, you will be working in a disgruntled company that is not focused towards the vision / mission but towards money. I.e. management should bribe me to do my job.  

Let me give you one real life example. A few years ago, I was working with a company that was under huge volume pressure. To jumpstart the volume, Management decided to incentivize the sales force (for one month) by suggesting incentives based on targets. It worked wonders, almost everybody achieved the target and got the incentives (40 inch Plasma TV), people who did not achieve the targets, got disgruntled and tried to pressurize the management to attain the incentive stating that factors beyond their control impacted their volume. Next month was very interesting, for the first 15 days (50 % time gone), the company only achieved 20% of the volume. Management got worried and called in the sales people. During the meeting I realized, that the sales team is given all the reasons under the sun to justify lack of volume delivery. In the end, the Management asked, “how can we deliver this month” and the united response came as “We can try to deliver (although its very difficult) if we are incentivized with a surround sound system”…….. this continued for the next six months, volume did get delivered but the sales team got their homes redecorated with incentives. Everyone outside the sales team was disgruntled, felling that the management is unjust………..

In Summary, in the short term, incentives do work. However, in the long term, incentives have a negative impact as it becomes term of business and demotivates people.

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