Beyond the Financial Incentives

Posted by Ady Howes on February 14, 2014 at 10:28am in Demonstrating Value in L&D

My question to you today is this... "..are there other ways to motivate others towards performance improvements..." other than just financial rewards. Let me explain more...

I've worked before in several organisations where financial incentives and rewards work well following a training programme. Team incentives seem to work particularly well where an increased level of business performance against a particular KPI, especially when paid directly into a staff social fund.

Sales, customer satisfaction, upselling products, promoting new services, generating leads are often rewarded with incentives following a training programme. I think this can offer a challenging, competitive environment to bring about the performance increases you desire.

At what point though, do these financial incentives become too much though. Isn't there a risk that too much incentive can foster an expectation that performance increases can only happen with financial incentives? Does that breed behaviour where employees only buy-in to raising their stakes when there is a bounty up for grabs? At what point would you say it's the right thing to do to look beyond motivating by financial gain?

Take for example Herzberg's Motivation theory (pictured below). This tells us financial rewards are amongst the things that "satisfy" and not necessarily "motivate". Whilst I agree incentives, particularly team ones, in the form of social funds or maybe shopping vouchers are great ways to reward and recognise, I also wonder whether this has a danger to make performance improvements following training short-lived. After all, once the incentive has been won and paid out, what else is there to aim for? I can surely then rest on my laurels?

So my question to you is, how much sense is what I think and are there other ways to motivate others towards performance improvements following your training programmes? What factors from this theory can we take advantage of to motivate our learners to embed their learning?

I'd really welcome your views on this one.....

Thanks

Ady

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feedback, financial, herzberg, incentive, motivation, performance, praise, recognition, rewards

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Replies

Jillian Tansey March 11, 2014 at 1:54pm

Hello again Ady

I came across this earlier

Although it is about satisfaction not motivation, one of the largest sections is praise & recognition...

Also, interesting to note this was done in 1999, i wonder how if the results may be different 15years on?

Jil
- Ady Howes > Jillian Tansey March 11, 2014 at 3:10pm
  
  HI Jill,
  
  Thanks for your input on this. I agree with you - stand firm! That's what I've done and it's been quite revealing to see how many stakeholders involved in this piece of work also feel the same. We're going to use communication, praise, recognition as the mechanics to drive the performance changes required.
  
  I wonder how many of those I've managed to influence (with the support of people on here) will think differently on future projects.
  
  Great to see this is backed by the survey infographic you've just shared Jill. Always delighted to see that Praise and Recognition scores so highly. A great message for our managers!
  
  Thanks again
  
  Ady
  - Jillian Tansey > Ady Howes March 11, 2014 at 3:51pm
    
    It's great that the stakeholders are on the same wave length as you! That's half the battle sometimes.
    
    I hope it all goes well :)
Mike Collins February 14, 2014 at 2:52pm

It would be wrong of me not to post this RSAnimate created from Dan Pinks Ted Talk The Surprising Truth About Motivation.

My biggest takeway that has stuck with me it is - "there is massive difference in what science knows and what business does
- Ady Howes > Mike Collins February 19, 2014 at 5:10pm
  Hi Mike,
  
  Really enjoyed that. REALLY. The content was brilliant and the presentation applied (as you can probably imagine) to my geeky side!
  
  Perhaps having watched that, there is some mileage in looking beyond the financial incentives. So, to you and the wider community, here's some help I could do with on this topic......
  
  I'm battling with myself at the moment on a training programme I'm developing. There's an offer of incentive on the table in the form of group social funds for hitting a particular target. I like this and I've seen it work well before.
  
  However, what I have also seen work well and fairly consitently is once the money has been won and the bounty is no longer on the table, performance can (and from my experience often does) fall away. So if money is a motivator, I'm struggling to find evidence that this suggests this works long time. Unless anyone has any...?
  
  So when asked how I would motivate, I found myself talking about the motivators in Herzberg's model -
  
  We collaborate with them and get them involved in building the solution to the issue
  
  We ask for their help testing out the various solutions
  
  We show them what peformance target we're hoping to achieve
  
  We let them know how close we're getting
  
  We talk to them and listen to their feedback on how it's going
  
  We say thanks for every single bit of effort to move towards the target every chance we have
  
  We recognise each individuals achievements in the process during our appraisal reviews
  
  ...and we continue to involve them and communicate with them... months and months after the roll-out of the initial training programme
  
  Maybe, as a gesture of goodwill, perhaps then, as a surprise gesture of thanks, there is a financial reward that is a prize for the end, not a carrot for the start
  
  Now I'm not sure what everyone else thinks, but that approach seems to be along the lines of what Herzberg says in his model and what the video shared by Mike (thanks again Mike) also says.
  
  So I'd be up for hearing back on what you think to this real live issue for me. Should I bow down to the financial incentive, or should I stand firm and place my stake in the ground of collaboration, team work, communication and praise as the motivators for this one?
  
  Let me know.... Comment below....
  
  Thanks
  
  Ady
  - Jillian Tansey > Ady Howes February 25, 2014 at 9:39am
    
    Hi Ady
    
    I came across a couple of things that might help, see links below
    
    http://www.ted.com/talks/dan_ariely_what_makes_us_feel_good_about_o...
    
    http://blog.ted.com/2013/04/10/what-motivates-us-at-work-7-fascinat...
    
    Jill
  - Jillian Tansey > Ady Howes February 20, 2014 at 3:37pm
    
    Hi Ady
    
    I also really liked that video!
    
    I vote stand firm & go with the collaboration & praise route! Although i do imagine that a surprise financial reward at the end would be received well. It's just ensuring that it's not an expectation they have that this will happen all the time going forward.
    
    I understand what you mean about performance dropping away after money has been won. Perhaps could you do like an accumulator type thing - like they get more money if they either continue at the same level or improve their performance by the next review. Kinda like Double or Nothing or the footy bettting where if all your teams win you get loads! And make it so if it's a team effort they all have to agree to whether they take their money now or try for the higher prize pot in the future, so they're all working towards a common goal. That is just a random idea i came up with, it's not been tested or anything so i have no idea if it'll work or not, as I've worked in industries in which financial incentives don't exist.
    
    I think involving them in the process & consulting them is always a good idea to get people on board regardless of money incentives.
    
    Jill
Jillian Tansey February 14, 2014 at 1:12pm

Hi Ady

This is such an interesting topic with no clear cut answers. I do think it can really depend on the organisation & the sector it works in. I work for a social housing landlord & we're a not-for-profit organisation & part of the company has charitable status so all our money is plowed straight back into the communities we work in, there isn't any spare cash for bonuses. So we do more for our employees in terms of benefits, work-life balance, training opportunities, secondments & recognition to maintain motivation & performance levels.

On a personal note, i find it helps to know that what i'm doing is contributing to the business goals. Its like that famous anecdote about the President going to visit NASA and he asked a janitor what he was doing & he said "putting man on the moon". Everyone contributing to the main aim of the business.

Awhile back i was involved in our VfM Self Assessment & one of the suggestions put forward for something to be used to keep VfM in everyones mind was to equate the money we save into something meaningful, so in our case - houses. So when we made a saving or efficiency we would know we were contributing to a "greater good". We did get a bit carried away with how we were going to present it but the basic prinicple of making people aware of their contribution is the same.

Similarly i when we have staff briefings the CEO outlines what achievements the company as a whole have made over a certain period of time, i think that collective recognition & achievement is appreciated.

I definitely think financial incentives have their place but i personally don't think it should be something employees expect for performing well.

Jill
- Ady Howes > Jillian Tansey February 14, 2014 at 1:27pm
  
  Hi Jill,
  
  Thanks for sharing that. I agree totally with everything you say. I particularly agree that achievement and contribution towards organisational objectives seems to be a key motivator. People need to feel like they are contributing to the greater good of which social care has massive benefits to our society.
  
  The collective recognition is great isn't it as well as the individual recognition for a personal and individual contribution. I guess a thank you card doesn't cost much. A heartfelt "I really appreciated what you've done with..." feedback message is not only cheaper and simpler, but often I feel overlooked.
  
  Great to hear you get these into your staff briefings and hopefully informal conversations too?
  - Jillian Tansey > Ady Howes February 14, 2014 at 1:51pm
    
    Totally agree that "thank you" or "well done" is often overlooked & underrated too.
    
    Unfortunately, some people/managers are better at the thank you's to the staff than others, so i feel it may be a bit inconsistent across the organisation. Something to work on i suppose.
    
    We conducted a staff survey last year which was a good way to see if staff felt valued/motivated, managed well, trained, supported etc. You could create a one tailored towards motivation in the workplace & their opinions on recognition & reward...?
    
    Jil