“And what about you?” I repeated. “How much of your responsibility, as a Manager, have you abandoned, thinking a bonus will be an effective substitute?”

“What do you mean?” Alicia asked.

“I mean, setting the context for the work, making the task assignments, making sure the system is appropriate for the work, adjusting the system for the work. How much of that goes out the window when you put a bonus system in place?”

Alicia was quiet. Finally she spoke. “I guess when we put the bonus system in place, we think it will do a lot of my job for me. The reality is, the bonus system may work against me.”

“Here is what I find,” I replied. “Companies put in bonus systems, because they don’t have managers who are capable of being managers. As their managers stumble around, ineffective, companies try to drive team behaviors with bonuses. What a mess.” -TF

“It’s like I don’t trust them to do their best without a bonus, and they know it,” Alicia explained.

“It sets up this stupid game and now people have excuses for their behavior. I’m not going to do this or that, because I don’t get a bonus for it. And people are smart. If this is the game, they will figure out how to take advantage.”

“And what about you?” I asked.

Alicia sat up, looking innocent.

“And what about you?” I continued. “How much of your responsibility, as a Manager, have you abandoned, thinking a bonus will be an effective substitute?”

“Your bonus system creates mistrust?” I repeated.

“It’s weird. You think if you give someone a bonus, that it will make them work harder. Like they weren’t going to work hard in the first place. Do you remember that contract that Joe has with his crew. When he explained, it almost sounded silly.

My contract is simple, my team comes to work every day and does their best.

“But if I pay a bonus, it destroys that. If I pay a bonus, it’s like I am saying, ‘Come to work every day and do less than your best. And if you do your best, I will give you a bonus.'”

“And what else?” I asked.

“This is a tough one,” she started. “Our bonus system. I think our bonus system is causing some of the problems.”

“How so?”

“Well, we wanted to make sure we didn’t get into lawsuits based on construction defects, so we pay a bonus to our engineering manager when we have zero claims. It sounds noble, but that sets up someone to over-work against our operations manager, who is just trying to get the job done.

“To make matters worse, we diligently work the project schedules to avoid delay claims. Delay claims can do more than suck the profit out of a job. So we pay a bonus to our operations manager when we have zero delay claims.

“So, now I have two people on the same team who are working against each other.”

“What else?”

Alicia began with a blank stare, then a hint of something in her mind. “I think,” she replied, “the worst part about our bonus system is that it creates mistrust.”

“And what else?” I asked.

“That the problems I observed did not come from the idiosyncrasies of the people involved, but from the systems that I created as the Manager,” Alicia replied.

“Like?”

“Like assigning a project team with two leaders, giving neither the authority to make a decision that would conflict with the other. I thought there was a personality conflict, when it was my system drawing out the behavior. If you want to make people really schizophrenic, assign them to report to two different masters.”

The room was empty except for the two of us. I turned to Alicia, “See it wasn’t that bad. How upside down was your stomach?”

“You know, in the beginning,” she started. “I was afraid that things would get out of control and create more of a problem. But, as the meeting continued, I finally realized that the very things that could blow my team apart were the same things that could weld it together.”

“What else did you learn?” I asked.

“I realized that I have to stop coddling people. My team doesn’t need coddling, they need leadership. And part of that leadership is that I am accountable for the results of the team.

“I am the one in position to know all of the changing circumstances reported by the individual team members. I am the only one with the authority to select and deselect team members. I am the only one with the authority to make or change task assignments. Most importantly, I am the one accountable for those decisions.”

“Tell me more, Joe. When you are given conflicting direction from Russ and Corey, how does that impact your driver crew?” I asked.

“First of all, I have a great crew, dedicated and very serious when the going gets tough. They know, at the end of this project, based on delays, there is going to be hell to pay. They know the excuses will fly and part of the blame will land on logistics.

“They also know,” Joe continued, “that, during the project, they have no control over priorities and sequence. They make recommendations, but they are not in a position to know the overall impact or changes in scope or changes in schedule. They are only in a position to move our heavy equipment as instructed.

“I keep it pretty simple. My only contract with them is that they do their best. And if, at the end of the day, the goals aren’t met, then the accountability for the shortfall must be with the leadership. It is leadership that determines the schedule, sets the pace, allocates the resources and makes the decisions that determine the outcome.”