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Incentivizing Performance: It Takes More Than Money to Bring Lasting Change

The common practice in motivating adults in the work force is to create opportunities for them to increase their compensation.  We have followed that practice for untold centuries; and still, some of us are shaking our heads and wondering why “money just doesn’t seem to matter to them.”

Well, money does matter.  And, for some of us, it matters a lot!  Our work suggests that people who are confident risk takers; fast, fluent communicators; results focused; and seek change and innovation are more likely to be positively influenced by variable compensation and incentive systems.  

That would account for about 7% - 10% of the population at large.  And that includes the people who design most of the variable compensation and incentive systems.  In essence, these systems are being designed around what motivates them – not around what motivates others.  As a consequence, most of these systems are not relevant.  And that is why, best case, they do work as well as we would like.  

Worst case, as demonstrated several times over by a variety of researchers involved in psychology, they do not work at all – especially if the performance involves cognitive (thinking, problem solving, etc.) skills rather than mechanical skills.  As a matter of fact, research conducted by the Massachusetts Institute of Technology shows that when cognitive skills are involved in the mix, there is a negative correlation between high incentives and high performance.  In the work-a-day world, that means that the higher the incentive, the poorer the performance.  Apparently, those involved in the program begin to overthink what’s going on, and even confident risk takers tend to “play it safe”.

So, if money doesn’t work for most people, what does?  Here are four areas that will help you create an inspirational/motivational culture within your organization (or within your family structure).  Anyone willing to use a little imagination can learn to use them.

Inspiration.  People are inspired by what is relevant to them.  Find out what is important to them during interviews, casual conversations, formal performance discussions, or whatever other opportunities may present come up.  (Financial cost of this incentive:  $0)

Delegation.  Give people a sense of autonomy and self-direction.  This leads to engagement or involvement.  This is not the same as empowerment.  Empowerment is an overused term that basically means that “I am giving you the authority to do what I want you to do.”  That type of empowerment generally leads to malicious compliance.  But that’s another story.  (Financial cost of this incentive:  $0)

Education.  People want to be good at what they do.  Provide personal and professional development opportunities that allow people to become masters of their trade.  (Financial cost of this incentive:  $0)<

Communication.  People want to know how they are doing.  Take advantage of every legitimate opportunity to give them real time feedback on their performance. (Financial Cost of this incentive:  $0)

If these are the keys to engagement for most of the adult working population, this is a program most of us can afford.  What have you got to gain by trying it out?

If you want to learn more about your specific motivational interests and leadership styles, send me a note (This email address is being protected from spambots. You need JavaScript enabled to view it.) and I will send you a link to our ProScan® assessment tool.


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