How to “Make ‘em” Do it?

As I write this, two of the three top headlines on a popular news website are about money.  Our culture is, to a very large extent, based on the tenet that money is the most important thing; so important, in fact, that it can buy you happiness (which is the OTHER most important thing).  Take the example set by the “Occupy *” movement.  What’s the picture that just popped into your head?  Was it a protestor holding up a sign proclaiming something like, “I’m part of the 99%!”?  The idea that money makes us happy is, at best, ridiculous and at worst is exactly what the Bible claims; “For the love of money is the root of all evil: which while some coveted after, they have erred from the faith, and pierced themselves through with many sorrows”.  Somewhere in the complex mathematics of social anthropology there is certainly an algorithm that correctly identifies the perfect amount of money one needs to be happy.  The Nobel Prize in economics surely awaits the person to write it.  For now, we’re stuck, once again, with our biases.

The misnomer that money motivates is rampant in business.  I believe it is the number one incentive on any managers list of things to throw at an underperforming team (“Incentive” and “money” are practically synonyms in American Business); and this is precisely the trouble with managers these days: they’re usually trying to manage entire teams all at once.

So what is the best way to motivate people?  Well it turns out it may actually be money.  But even if that’s the case and most of your employees respond positively to promises of trading more cash for better performance, there are still all sorts of dilemmas left over.  How much is the right amount?  Where do the diminishing returns begin?  How long can I ask them to sustain performance before the money loses its value?  The answers to all of these questions are going to be different for everyone.

My personal philosophy on incentives is much simpler than worrying about complex compensation and reward systems: ASK THEM.  That’s right, it’s that simple.  Just ask.  Anything that incents can technically be called an incentive.  This means that a smile, a high five, a sticker and even the words “thank you” can be used as extremely powerful incentives.  The problem is these things are underutilized and I think it’s leading the largest companies in the world to spend billions of unnecessary dollars a year on long term bonus systems that don’t offer line of sight from performance to payout.  This is not rocket science.  If an employee does not look at their annual bonus check and immediately flash back to the accomplishment of all of their specific goals over the past 12 months, the bonus system has failed.  If instead the employee sees dollar signs and starts daydreaming about that new car or their new hot tub, the bonus system has failed.

The biggest risk with any incentive, big or small, is entitlement.  The line between earned and entitled is so razor thin that it becomes extremely important to carefully track and gauge employee reaction to your incentive.  Too much negative reaction when the stimulus is suddenly absent denotes expectation and expectation will almost always lead to entitlement.  So vary it up.  Find out a number of your employees’ personal interests so that there’s always a new and exciting way to say thank you for a job well done.  I’ll touch on desired and undesired behaviors at some point but, for now, suffice to say that if you’re appropriately incenting your employees, eventually the natural byproduct is going to be the most coveted thing in all of business: discretionary effort.

None of this is easy unfortunately.   Unless we’re ever somehow miraculously able to oversimplify human behavior, designing an incentive program that works for your team is always going to be hard work.  The point I’m trying to make is that, well, it’s worth it.  Not only will you eventually start to see that discretionary effort, your people are actually going to enjoy coming to work (almost) every day.