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Put The Carrots Away

clappingWhat really motivates people at work

I find it ridiculous the way most business leaders think about and act with respect to motivating people. Even given the enormity of scientific evidence, there still exists a chasm between what research has proven decade after decade and what business leaders actually do. Going back to the 1940s, numerous studies have shown that what motivates people most at work is an understanding of how they make a difference at work and feeling recognized and appreciated for doing a good job.

If you add “relationship with my boss” to the list, you’ll also have the top three reasons why someone is loyal to his or her employer.

The problem is that too many leaders have a carrot-and-stick mentality and don’t really understand what will drive employee performance and results. They operate from assumptions about human (employee) performance that are outdated, not challenged enough and simply untrue. A simple Google search will provide mounting evidence going back seven decades attesting that rewards and incentive schemes rarely work and actually do more harm than good. Yet most business leaders still rely on bonuses, plaques, motivational posters and other shiny objects to drive employee—and ultimately company—performance. A major reason why is because reward companies have literally tricked them into thinking it’s the right approach. These reward companies go as far as marketing their programs as employee performance drivers and culture-changing programs.

A Few Examples
I’ve seen many examples of good companies who have succumbed to the misconception of rewards as motivators for performance. For example, my company was invited to meet with executives of a publicly held company frustrated with the lack of return on its $1.2 million annual spending on rewards. What we found was a significant divide among human resources executives who were defending their budget and business-line leaders who were finding that the rewards were not driving any sustainable behavior change. To make matters worse, within six months they had already eaten up close to 75 percent of their allocated budget for the year. Does this sound familiar?

How about the story of a global airline spending $45 million annually in rewards and bonuses to improve customer results? Would it surprise you that a senior leader said that while it felt good to dole out $45 million to reward employees, he wasn’t sure the company had achieved a meaningful system that could truly drive behavior shift and change? How do you think customers and shareholders would feel about this?

These companies are not alone. In fact, many of you reading this probably have been guilty of falling for the same rewards trap. So what should you do to avoid this pitfall? Let me share with you an illustration of two very different pathways for motivating employees. One is proven to fail time and again. The second requires new thinking for how to engage employees and measure results.

The Carrot-and-Stick Approach
The carrot-and-stick pathway includes the typical “thank you, make you feel good” program that rewards employees who demonstrate desirable activities. The estimated rewards budget for this type of program is only $50,000. The budget is based on an approximation that only 20 percent of employees actually participate. The program does not include anything around ongoing training, reinforcement or accountability for managers and employees to encourage appropriate participation. It is quite obvious that if there were to be too much participation, the rewards budget would grow exponentially and the return on investment would shrink just as fast.

What about the other 80 percent of employees who won’t participate, who won’t get a reward? Where’s their incentive? What percentage of managers do you think would use this program to drive performance of their people? Would this type of effort really make any positive impact on culture, the customer experience and business results? The answer is a resounding “No!”

The Science of Motivation
It’s clear to see that this typical carrot-and-stick approach is expensive and ineffective for driving the desired business results and culture shift. Let’s look at a fundamentally different approach, based on research into the science of motivation, which shows a clear link to business results and doesn’t require any investment in rewards.

Here are three strategic and simple ways to manage behavior. Doing these three things will help your company increase employee engagement, strengthen the work culture and improve the experience provided to customers, all while helping employees understand their impact at work, feel appreciated and recognized for a job well done and see a clear link to financial results.

1. Capture real-time examples of employee behavior and share them. Recognizing others is the strongest form of cultural currency. A formalized approach enables leaders to track which employees captured examples of coworkers delivering behaviors/best practices that drive results, as well track those being caught. Leaders are also able to hold managers accountable to making sure ample best practices are shared each week in order to replicate employee behavior. Three ways to capture behaviors and best practices include self-capture, where employees share a personal example of a best practice; peer-to-peer capture, where managers and employees share examples of what they’ve witnessed colleagues do; and customer capture, where customers provide examples of the experience they’ve had with employees.

2. Assess consistency of behaviors. Use the existing values your company has to draft behaviors to unite all employees in the delivery of the desired company experience. Then expand these basic behaviors by developing more specific behaviors for each and every job category. Doing so helps employees better understand and commit to delivering the desired experience for customers and each other. On a quarterly basis, have all employees rate how consistently they deliver the behaviors. In order to have an optimal picture of the culture in action, you could also have employees confidentially rate how consistently they believe others in their department demonstrate the behaviors that drive success. With behavior consistency data, you can begin to draw meaningful comparisons between employee levels, departments and other variables. In addition, correlations with key financial data will provide evidence for what’s really driving success.

3. Link customer feedback to company results. Ask customers the single most important question to understanding loyalty: On a scale of one (low) to ten (high), how likely is it that you would recommend the company to others? Use the data collected in conjunction with anecdotal feedback, employee behavior consistency data and examples of captured behaviors/best practices to enhance your view of where your company has strong engagement and motivation and where there are opportunities for improvement.

As business leaders, you have the choice. You can settle with the misinformed status quo, thinking that carrots and sticks or trinkets and trophies will drive motivation and impact employee performance; or, you can listen to what seven decades of research tells us over and over again. You can build and manage a culture that helps employees understand their purpose at work and how they impact success, all while recognizing them and demonstrating appreciation for doing a good job.

Material Handling Equipment Distributors Association
Gregg Lederman Meet the Author
Gregg Lederman is CEO of Brand Integrity Inc., located in Rochester, New York, and on the Web at www.gregglederman.com. Lederman will present “Five Dimensions of Brand Integrity” at the 2011 MHEDA Convention at 9:30 a.m. on Tuesday, May 3.

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