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Mon, Apr 16, 2012

Talent Strategies

Why Your Employee Motivation Program Isn’t Working

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Years of research unequivocally supports the conclusion that traditional employee motivation programs actually decrease the overall morale and productivity of a workforce. Unfortunately, many well-intentioned human resource professionals continue to spend their resources attempting to create motivational programs that, while they make sense intuitively, do far more harm than good.

When I refer to traditional reward-and-recognition programs, I mean those that make a presumably desirable incentive contingent on some level of performance. I also refer to these as “dangling carrot programs.” Sample carrots include financial bonuses, gift cards, desirable parking spaces and extra vacation days. Among all programs, “Employee of the Month” stands out as the most counterproductive.

The trouble is, they require you to keep winding up the employee to get the desired uptick in behavior. While you may get short-term changes in effort, it doesn’t last because the behavior is driven by the extrinsic reward and not an increase in the intrinsic value of the task to the individual. In fact, there is an inverse relationship between the value of the reward and extent to which an individual takes pride in their work.

The mentality is, “I’m only doing this for the money.” Consider, for example, that many people are more engaged and work harder when doing volunteer work than they are when they are working at their “real” job. So, giving high levels of discretionary effort has to do with more than just monetary compensation.

Reward-and-recognition programs are intended to increase an organization’s overall level of employee morale while simultaneously increasing productivity, but dangling carrot programs do just the opposite.

How?

Imagine fitting employees into one of three buckets: Top performers, average performers and poor performers. Now, when you put a program into place, who wins? The top performers! What is the impact on the poor performers? None or negative; the program is just another example of their “loser” status in your organization.

The real problem comes about when average performers decide to increase their level of discretionary effort, but fail to “win” because they just can’t measure up to the top performers. Typically, this situation leads to disgruntled and less productive employees who swear not to bother working harder than need be because no one notices and they certainly don’t get anything extra out of it.

By the way, it becomes progressively more difficult over time to get employees who lose motivated again. Do you really want to have to worry about dangling carrots every day and every time you want your employees’ best effort?

What do you think? Are traditional reward programs ever successful?

About the author: Dr. Paul Marciano is author of “Carrots and Stick Don’t Work: Build a Culture of Employee Engagement with the Principles of RESPECT.”

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  • http://www.itoctopus.com Fadi El-Eter

    I like your closing paragraph about segregating employees into high performers, middle performers, and poor performers.

    The problem with traditional motivational approaches is that they are always architected for the top performers – it’s like a raise for the top performers (because top performers will never be outperformed by the lower performers).

    I think these so called “motivational perks” are not really to motivate people, but to keep the best performers from leaving the company for another one.

  • mcg

    Good article, but where is the rest of it? What does work?

  • http://www.awomanofsubstance.net Holly Rotman-Zaid

    I have worked in the promotional products industry for over 25 years–and there are programs that can work. Paul is so right about short term effects and the separation between the big winners/producers and everyone else.

    What does work is creating a situation where everyone has the opportunity to succeed. Instead of only recognizing the biggest producers–look into having everyone compete with themselves to go beyond what they have already done. If you give incremental awards for small steps to anyone that makes them then everyone has potential.

    Another thing that works is reward other than “sales” performance. Look at other factors that motivate folks and get them working better–so maybe the behavior to reward is to someone that makes the team/department function better. This can be anything from cleaner floors so that no one slips to going above and beyond the call of duty. When you start to reward based on your mission rather than just your financial goals you will have more success. The rewards can be product that then help everyone identify as a team player and builds the team rather than just those sales performers who are often loners.

    Amazingly, this is really hard to get corporate America (or even smaller business folks) to understand because it is not what they are used to doing. It is fun to see these sort of programs work!
    Holly

  • Josh

    In competitive volleyball we have a system of winners. Top folks compete for the gold, then another group competes for silver, then bronze, then copper, then they have flight 1 champs, flight 2, flight 3. That way you always have a motivation to just get to the next tier and compete for that one. It works from a motivation standpoint.

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  • http://www.PaulMarciano.com Paul Marciano

    Thanks to everyone for your wonderful comments! It really comes down to creating a culture and environment where everyone can thrive — not just the very best who represent only a small-modest percentage of the typical workforce. And, programs have no impact on culture.

    MCG asked: “What does work?” The short answer is RESPECT, and, I will be presenting on my RESPECT Model over the next several blogs. (Of course, if you can’t wait feel free to pick up my book: “Carrots and Sticks Don’t Work: Build a Culture of Employee Engagement with the Principles of RESPECT” (McGraw-Hill) from Amazon or my website — http://www.paulmarciano.com.

    Also, you may be interested in a blog that I wrote during Christmas for Smart Briefs called: “What Santa Can Teach You about Motivating your Employees” — http://smartblogs.com/leadership/2011/12/21/what-santa-can-teach-you-about-motivating-your-employees/.

    Thanks again for your comments and interest. Please feel free to reach out to me directly at: paul@paulmarciano.com

    Regards, Paul

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  • http://www.i2i-align.com Paul Hebert

    The author asks the question “Are Traditional Reward Programs Ever Successful? And the answer is yes. Research has shown when designed correctly reward programs can: Increase individual performance by 27%, Increase team performance by 45%, Year-long programs generated 44% increase in performance, Programs run for 1 week or less increase performance by 20% (study from http://www.TheIRF.org)

    The author however cites poorly designed programs when talking about how incentive programs fail. That’s like looking at botched medical procedures and asking if going to a doctor is bad for you? The fact is when designed correctly, used in the appropriate context incentives and rewards do a lot to signal desired behaviors and reward people for taking risks in new competency areas.

    Don’t hate the game. Hate the player. The real issue is educating HR to the ways in which incentives work, recognition works and other elements of influence work. The answer isn’t to demonize a proven (yes proven) tactic in order to sell books and processes.

    HR – it’s about knowing what to do when. Not ignoring something that can and will work effectively when implemented correctly.

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