Tag Archives: reward

Limitations of Performance-Reward

“There is nothing wrong with Performance-Reward (Work=Paycheck),” I said. “It is the contract that we make with employees. They show up each day and do their best in exchange for the agreed-upon compensation.”

Helen looked down, picturing something.

“I know you see yourself as a Motivator,” I continued. “And, here is why Motivation is so important for managers.

“I asked you before, if I was getting the Performance I wanted, as a Manager, why did I give two hoots whether it was Motivation or Manipulation (Performance-Reward). Here is why.

Performance-Reward requires you, the Manager, to be present, either physically present or present-by-threat, meaning, you will be back to check on things. So, Performance-Reward requires the proximity of the Manager.

“Second, the duration of the behavior is short, happens only to the specification required to get the reward. And if something happens to threaten that reward, diminish that reward, delay that reward, the performance stops.

“And that’s why Motivation is so important. As a Manager, we need sustained performance even when we are not around. We need more than Performance-Reward.”

Reward or Reprimand?

Helen’s face dropped. Her smile extinguished.

My words, “Sounds like manipulation to me,” rang in her ears.

“But, but, what do you mean?” she gasped, not in desperation, but surprise.

“I mean, most of the things we do as Managers, fall in line with manipulation. We create expectations of performance, we get the performance, the team member gets a reward.

“Or more clearly, we create expectations, if we don’t get the performance, the team member gets reprimanded. Either way you look at it, most of what we do as Managers, is manipulation.”

I Certainly Don’t Manipulate

“Well, I certainly don’t manipulate my team members,” Helen insisted. “I like to think that I motivate them to get the work done.”

“Tell me, how do you do that?” I asked.

“Well, I think it begins on their first day at work. Our orientation does a really good job of explaining to them our philosophy as a company, our mission in the marketplace, where we standout against our competitors. Then, everyone, no matter what their role, goes through a pretty intensive training program, to make sure they have the skills they need to be successful. In my opinion, it’s pretty motivational.”

“How so?” I probe.

“Once they come out of training, they have to pass some competency tests, to make sure they actually have the skills they need. If they do that, they immediately get a pay rate increase, from training pay to Pay Band I. Our training pay is just above minimum wage. Pay Band I is calculated based on their actual role, their job description. It’s beginner’s pay, but it’s a step up, so immediately, they are rewarded for their efforts.”

“So, if they successfully complete their training program, they receive a reward in the form of a pay increase?”

“Yes,” Helen replied, smiling and nodding.

“Sounds like manipulation to me,” I observed.

Motivation or Manipulation?

“So, what’s the difference between motivation and manipulation?” I asked. “My kid is in the back seat of the car, and I ask him to put on his seat belt. I tell him that if he puts it on, we will go get ice cream as a reward.

“What is it? Motivation or manipulation?” The class sits on the question. Several want to leap out of their chairs with the answer, but they know it will make them a target for the discussion.

“My kid is in the back seat of the car, and I ask him to put on his seat belt. I tell him that if he doesn’t put it on, he won’t be able to play on the computer tonight.

“What is it? Motivation or manipulation?”

Reward or Punishment?

“So, you clearly understand that you are the problem?” I asked. Events became clear for Reggie. His incentive program backfired. In the short run, his company’s margins were not compromised, but long term, he created a culture cloaked in clandestine competition. His managers gamed the system to beat margin quotas.

“We hired a compensation consultant to help us structure this incentive program,” Reggie defended. “They were very professional and seemed expert in their process.”

“Tell me, Reggie, what impact did this incentive compensation have on your manager’s contract?”

Reggie moved his head an inch, “What do you mean, what contract?”

“You know, the contract. The contract that says You get paid every day to come to work and do your best. To focus your efforts where they are most effective. To give us your best effort.

Reggie didn’t know how to respond. “Yeah, but that doesn’t seem to work around here. People don’t come to work and do their best unless you, you, you hold some of the money back and give it to them as a bonus.”

“So, what you are saying is that you don’t trust them to do their best, so you don’t give them all their money unless they show their best effort? Then you give them their, well, you call it a bonus.”

Reggie slowly nodded his head.