incentives Archive - RecognizeThis! Blog

Archive for the "incentives" Category

LeadershipLivecast April 24th: Doing Still More with Less

Recognize This! – We are all in a position of needing to do more with less. Learn from more than 40 industry experts on how to get high performance while avoiding burnout.

Are budgets still tight for you? Are you struggling to still do more with less?

In many ways, I think we all are. Organizations have settled into the patterns and expectations set after reductions and belt-tightening from the 2009 recession. We asked remaining employees (including ourselves) to do more, sometimes doing the work of two or three people, and we are still doing so today.

Leadership is quite happy with these productivity increases and likely sees them as sustainable over the long term. Those of us in HR closely tied to how employees are doing in terms of engagement know better.

If you’re in the position of trying to still do more with less, then I encourage you to join me and 40 other experts for a LeadershipLivecast from The Ken Blanchard Companies on Wednesday, 24^th April, 12:00-2:30 Eastern (9:00-11:30 Pacific; 5:00-7:30 GMT). What’s this all about?

“Many of us in the workplace are stressed, overworked, and overextended. Yet our organizations seem to be asking still more of us. How do we learn to do more with less? And then still more with less again?

“Join us on April 24, 2013, as we explore ways to drive and maintain high performance without burnout. Learn from experienced managers, senior coaches, and leadership experts on how to avoid the deal-breaking moment when your top talent declares, “No more doing more with less.”

“Register Now to hear some of leaderships best known thought leaders share their insight on how they have managed to accomplish more with less. Featuring: Elliott Masie, Steve Roesler, Charlene Li, James Maas, Lee Cockerell, Fons Trompenaars and many more. Plus live commentary from Ken Blanchard and Scott Blanchard!”

I’ll be sharing specifically on how to do more with less recognition and rewards budget. I hope you can join the livecast.

Are You Sanctioning Cheating with Your Incentives Program?

Recognize This! – Never forget to recognize the “how” as well as the “what” or you’ll pay the price of the Law of Unintended Consequences.

All over the news in the US is a story about a cheating scandal in the Atlanta Public Schools. My understanding of the situation is that some teachers and administrators would gather for “erasure parties” to erase and re-enter correct answers on students’ standardized tests. Now, these educators are being jailed and prosecuted for fraud, and the reputation of the Atlanta Public Schools is ruined.

Why would teachers do this? Because the “No Child Left Behind” education policy rewards schools based on how students perform on these tests, especially for dramatic improvements. From the news coverage, I understand there were great benefits to the educators making their schools appear much stronger in improving standardized test scores.

Why do I bring this up in a blog about strategic employee recognition? This is a classic example of the unintended consequences of incentives. “If you do this, you get that.” Or, in this case, “If you achieve X level of improvement, you get Y compensation bonus.”

While certainly an egregious example – and I’m sure some participants felt heavily pressured to participate – this kind of thing happens in organizations of all kinds all the time. Have you ever seen:

Quality sacrificed in order to meet a delivery deadline that has a bonus attached to it?
Safety issues swept under the rug to achieve a “zero safety incidents” goal?
Peer pressure on colleagues to keep quiet about illegal or at least unethical practices of their colleagues?

Incentives programs can play a role, but be careful about how you choose to implement them. Remember, it’s just as important to recognize the “how” – the way in which results are achieved (in line with your core values) – as well as the “what” – the results, themselves. Separating the two inevitably leads to the fulfillment of the Law of Unintended Consequences. Put your focus instead into strategic recognition - “Now that you’ve achieved X, here’s surprise recognition and praise for your achievement.”

What other examples of unintended consequences have you seen in your career?

Compensation Café Round-Up: Bonuses, Cash Rewards, How We Work, Retention and More

Recognize This: In this round-up of my last five posts, I examine challenges with incentives, bonus and cash awards when inappropriately applied as well as ideas for how working less can help us work more.

It’s a good many months since I’ve posted here a round-up of my posts on the Compensation Café blog. Since I posted there today, here is a quick summary of my 2013 Café posts. Click through on the titles to read the full posts.

Choosing the Right Currency for Compensation & Rewards (28^th February 2013)

If you polled your employees and asked them, “What kind of rewards would you prefer?”, how do you think they’d respond? The vast majority of the time, the answer is: “Cash.” Of course we all want more cash. But what employees say they want for rewards, what actually works best to motivate employees, and what employees enjoy as rewards are entirely different things. In this post, I examine these issues in more depth.

Why Working Less Helps Us Work More (20^th February 2013)

Looking at research and comments from Tony Schwartz, I examine the possibility that working less could actually help us work more. Don’t worry. I’m not advocating a 35-hour work week or two months as standard vacation policy. I am arguing for building renewal into the cultural rhythm of the organization. We need to consciously encourage our team members and colleagues to renew while at work. To, yes, work hard, but then take reasonable (and regular) breaks to renew, to catch up with friends and colleagues, and – through those casual conversations – to innovate.

Bonuses, Perks and Benefits – Finding What Works (and What Doesn’t) (8^th February 2013)

In this post, I shared my take on several bonus and benefit programs that hit my newsfeed. I discuss the challenges and what you can do instead with perks programs that reward only a select few, mandatory sick leave and culture as the driver of all other rewards.

Why Employees Actually Leave (Hint: It’s Not Money) (29^th January 2013)

I attended a webinar given by Leigh Branham, author of The Seven Hidden Reasons People Leave. In this post, I share the main points I learned in the webinar:

A significant gap exists between why managers think employees leave and why they really do.
Better pay alone or more perks cannot fix the problem of employees feeling undervalued and unrecognized.
Pay and benefits are growing as areas of concern in recent years.

I also share my lessons learned:

Create survey instruments or methodologies that deliver more reliable information.
Respond to the reality of today’s workforce, not the experiences of the past.
Restore benefits and pay as quickly as possible.

More Unintended Consequences from Ill-Planned Incentives (8^th January 2013)

What motivates us at work is ultimately a very personal and individual topic, though generalities do apply. That’s why I get a chuckle out of research study after research study showing we nearly always guess incorrectly what would motivate others. In this post, I share two explicit examples of this:

Perfect Attendance Awards Incent the Wrong Behaviors
Unintended Consequences of Incentives at the Olympics

3 Critical Questions to Ask Before Implementing an Incentives Program

Recognize This! – Incentives and employee recognition are two very different programs. Be sure you’re selecting the right one for your goals and then implementing it correctly.

Once again, a theme seems to be running through my RSS reader – the problem with incentives. Incentives can have a role to play in a Total Rewards solution, but problems often arise when organizations use incentives as the sole or primary method of recognition and reward.

Why is there a problem with incentives?

Simply this – recognition and incentives are two very different things. Incentives state up front for employees, “If you do X, then you’ll get Y.” The stated goal and the end-result reward are known. Recognition, on the other hand, is always a surprise. What is worthy of recognition is clearly defined, but when you are recognized and the reward associated with it are always a surprise and ideally very timely when given. In other words, recognition is: “Now that you’ve done this, here is your recognition.”

Why is this difference between recognition and incentives important?

More often than not, incentives are poorly structured, encouraging and rewarding employees to do the wrong things.

This Wired article shares a terrific example of a grocery store chain monitoring employees on how quickly they complete tasks. Exceeding expectations earns greater rewards, but as a result (in the words of one employee), “The guys who made the scores were sweating buckets and throwing stuff around the place.” Because of poorly designed incentives, work got done faster but poorly, leading to a worse customer experience.

A Harvard Business Review blog post shared several stories of incentives gone wrong, including a bus system in an Asian city that rewarded employees based on on-time route schedules. That only incented drivers to skip stops and leave passengers waiting during peak travel times to ensure they maintained on-time schedules!

What can you do to avoid poorly structured incentives?

The HBR blog authors suggest:

“Awareness of the problem can help organizations take the next step — effective measures to correct it. Once management teams understand the behaviors that are driven by their measurement and reward systems, they should calibrate to make sure they are incentivizing exactly the behaviors they want from their people. They should remind managers and employees alike of what should be measured and rewarded. They should also be on alert and watch for undesirable behaviors and trace back its connection with reward systems.”

“Make sure they are incentivizing exactly the behaviors they want from their people” – that’s the key. You must be sure the behaviors you are recognizing and rewarding are the ones you want to see. To be clear, you must recognize the “how” as well as the “what” – how the work got done as well as the end result.

HBR also highlights another critical element:

“Purpose has to shine through loud and clear… On the one hand, good measurement systems are needed to track progress, and incentive systems are needed to motivate and align people. On the other hand, it is far more important to stay true to the purpose. We believe the pendulum has swung too far one way, and that balance needs to be restored.”

Recognition done right (after the fact, “Now/that” recognition, not “If/then” incentives) intentionally aligns the purpose of the organization with the desired behaviors (usually the company values) being recognized and rewarded. Most organizations have already defined what they need to see from all employees to achieve their strategic objectives. The trick with effective, strategic employee recognition is now making it a point to recognize and reward employees when you see them living those desired behaviors in their everyday work. Align purpose, behaviors and recognition and you will see measurable success.

Does your organization focus on incentives or recognition? Which do you see as more effective?

Now We’re Getting It – Total Rewards Critical To Engagement (When Done Right)

Recognize This! – Increasing concerns around risks raised through reward practices now include employee engagement near the top.

The Chartered Institute of Personnel and Development (CIPD – similar to SHRM in the US) recently released research on Reward Risks. Considering the workplace environment, state of retention and recruiting, these were the top two concerns reported by reward professionals:

Employees don’t appreciate the value of total reward offering
Reward not engaging employees

“Rewards engaging employees” has moved up to the second slot from seventh place in 2011. That could have something to do with the impact of the UK’s Employee Engagement Task Force raising the visibility of engagement as well as offering tools and resources for engagement improvement (and more knowledge on how rewards should align to help address engagement).

I commented on these findings:

“The CIPD’s findings echo Globoforce’s own discoveries from its UK Workforce Mood Tracker survey. While making employees feel appreciated through rewards can have a positive effect on employee engagement, simply recognising their contribution can have a more meaningful impact.

“More than two-thirds (70 per cent) of Globoforce’s respondents felt that being recognised made them more satisfied with their work and position within a company indicating that it is an important area for organisations to focus on.”

All of this made me have a think about this advice out of web design company Ciplex about making the line between money and recognition very clear.

“Employees spend a major part of their lives at work. They should be there because they love their jobs and not because they get paid to come in. That’s the reason why, at Ciplex, we don’t give bonuses, don’t have reviews tied to raises, and, simply, do not use money as a motivator. We take money off the table–from the hiring process to daily operations. In return, we have the most enthusiastic, dedicated employees, who truly give a $%*# about our company. In fact, they often get offers for higher-paying jobs and turn them down.”

That’s the power of strategic, social recognition – to recognize and, yes, reward employees, but do so in a way that uses a completely different “currency” than the cash of compensation and with a very clear focus on creating a culture in which employees want to engage.

What are your top concerns for rewards in your organization in the coming year?

More Employee Recognition Gone Wrong Lessons

Recognize This! – “Perfect Attendance” awards are a classic example of incenting the wrong behaviors.

I wish I read more stories of employee recognition done right, but unfortunately the trend seems to be more in line with this post – a 2-to-1 ratio of bad to good practices. First the bad recognition examples:

Perfect Attendance Awards Incent the Wrong Behaviors

Perfect Attendance awards rank high on the list of old-school employee recognition practices that incent the wrong behaviors. Why is this bad practice? Think about it. You’re encouraging employees to come to work sick, which only serves to spread their germs to healthy workers. More to the point, sick workers at work cannot be fully focused on the task at hand so they are working below par anyway. In some roles, this can have drastic consequences.

This is especially true when the incentives for Perfect Attendance are preposterously high, as in the case of United Airlines offering Ford cars to employees with perfect attendance. Yes, as the United representative states, you want to encourage employees to be on the job as expected to ensure consistent, reliable service, but I argue I do not want a sick, inattentive airplane mechanic approving my jet for takeoff. In poor culture companies, what these awards are really asking is “Please don’t slack off by calling a sickie and leave your colleagues hanging.”

Instead, organizations should work to create a culture of recognition and mutual respect in which employees want to be at work to help each other when they are well. Such an environment also puts trust in employees that when they are truly sick, they will take care of themselves, knowing their colleagues can pick up the slack.

Self-Promotion Recognition

Should employees be able to call attention to the good work they do? Of course! But that shouldn’t be the basis for employee recognition in your organization. I was shocked by this article that seems to encourage self-promotion of achievements as effective, appropriate recognition because “bosses are busy, too!”

Please. I agree bosses aren’t going to see every good thing going on in an organization. That’s why true peer-to-peer (or better yet, everyone-to-everyone) recognition is critical.

Peer-to-Peer Examples from Zappos

Encouraging every employee to notice and appreciate the good work happening around them every day is one the most powerful and effective means of recognition in the workforce. Think about it. You are encouraging everyone to so completely internalize your core values, desired behaviors and strategic objectives, they are able and willing to acknowledge and appreciate those very things in the work of their colleagues.

Zappos is often in the news for their strong culture. Here’s yet another story of how they do peer-to-peer recognition right.

Do you want employees to be committed to showing up at work (perfect attendance) or to living your values and contributing to your success every day?

Compensation Cafe Highlights: The Good and Bad of Bonuses

Recognize This! – Bonus and perks can have a place, if done right.

In the last month or so, I’ve had the opportunity to post to Compensation Cafe, a highly beneficial and informative multi-contributor blog I’m honoured to be a part of. Indeed, Compensation Cafe was recently named to the 100 Best Resources for Web Managers list. My recent posts are listed and linked below. Click through for the full stories.

Celebrating Success: Who Do You Reward? (July 10, 2012)

The last few years have been difficult, indeed, for many organizations. Layoffs, pay cuts, pay freezes – these were the norm across organizations of all sizes and industries of all types. In recent months, we’ve begun to see a turnaround as struggling companies see a return to profitability. How organizations react to that success is quite telling. And that reaction usually takes one of two forms: (1) Recognize and reward the top performers only; or (2) Recognize and reward appropriately all those who contributed.

Out-of-Whack Bonuses Give an Entire Industry a Black Eye (July 25, 2012)

Do bonuses have a place in a modern compensation and benefits structure? Yes, they do. Let the record show I am not unequivocally opposed to bonus programs, though I do often write about the downsides. But bonuses can have a place under certain conditions and with certain constraints and conditions. In this post, I propose the bare minimum need for Bonus Conditions and Bonus Constraints.

Bonuses & Perks That Work (August 8, 2012)

Lately it seems I’ve written mostly negative posts about bonuses and executive compensation pay, though I did write about executives admitting they’d give up some of their incentives in exchange for recognition. Well, today, I’m pleased to bring a post about a CEO who did just that. Lenovo CEO Yang Yuanquing is the type of leader who understands the success of the entire company is entirely dependent on the contributions and behaviors of the individual employees. More to the point, he made sure to honor that by recognizing every employee for their efforts that led to a net profit increase of 73% year over year. In this post, I also relate a company that pays employees $7,500 to take a fully disconnected vacation.

Looking back on these posts, I see bonuses and incentives have been my focus. Tell me, have you seen bonuses or incentives that work? What’s the worst bonus/incentive structure you’ve been subjected to or heard of?

Unintended Consequences of Incentives at the Olympics

Recognize This! – After-the-fact recognition delivers better results than if/then incentives, which can be easily gamed.

I’ve written before about the difference between recognition and incentives. This is an important distinction to understand, as is the distinction between incentives and motivation.

This was brought home to me in particular this week in two ways – the Olympics badminton scandal and my webinar yesterday with Jennifer Lepird, senior compensation business partner for Intuit and program manager of their Spotlight employee recognition program.

Recognition and Incentives (and Motivation) Are Very Different

I’ll be blogging more next week on the many lessons-learned and best practices Jennifer shared, but with the badminton news in the back of my mind, this nugget stood out:

“It’s important to understand the difference between recognition and motivation. Leaders often get the two confused. Recognition is something done to reward a specific behavior or outcome – something you want repeated from all employees. Motivation is given with a purpose to inspire, but it’s not tied to an outcome or behavior. Incentives fall in the motivation category.”

I commented that there is often the same confusion around recognition and incentives (which have a set of predetermined rules), people will often find a way to get around the rules or game the rules of an incentive program. Jennifer sadly agreed with me, saying she’d seen many times people finding ways to “game the system.”

Unintended Consequences of Incentives at the Olympics

And that’s precisely what happened in the Olympics badminton scandal (and perhaps to a lesser extent in the track cycling event as well). For those who may have missed it, three teams were sanctioned and then disqualified for intentionally trying to lose their matches. (In one spectacular instance two teams playing each other did this, making the very poor play from top-seeded countries very obvious.)

Instantly, one has to wonder, why would Olympic-level athletes work hard to lose? As the news explained:

“Teams blamed the introduction of a round-robin stage rather than a straight knockout tournament as the main cause of the problem. In the round-robin format, losing one game can lead to an easier matchup in the next round.”

The bottom-line: There were very clear incentives – pre-determined rules and outcomes – for them to do so. Namely, an easier quarterfinals competition and a better shot at the gold.

Of course this is not “within the Olympic Spirit,” as many observers and other athletes/competitors commented. The Olympic Spirit has as much to do with the “how” as the “what” – how a win was achieved as well as the win itself.

And that’s why in most cases I strongly recommend a strategic recognition program over a traditional incentives scheme. Recognizing and rewarding the behaviors and actions involved in achieving the outcome (as a surprise after-the-fact) is far more effective than incenting behaviors – and feeding into the law of unintended consequences – with known rules and outcomes that can be gamed.

Photo Credit

Recently on Compensation Cafe: Executive Comp, Bonuses, Productivity, Trends in Recognition & More

Today’s post is a quick catch-up on my recent Compensation Café posts. Be sure to click through for the full story.

Executives Would Give Up Incentives for a Little Recognition (27^th June 2012)

PwC recently published a quite comprehensive report, “Making executive pay work: The Psychology of Incentives”, on the premise that executive compensation practices are flawed as evidenced by the massive increase in executive pay packages as compared to average employees for seemingly little in return. The key findings of the report are quite interesting, especially the design recommendation: “Money is only part of the deal – and recognition matters as much as financial incentives. Pay is as much about fairness and recognition as it is about incentives. Simpler plans can achieve the recognition benefit with less discount to perceived value.”

If I Don’t Get a Bonus, I Don’t Want the Job (14^th June 2012)

Many decades ago, compensation was “a day’s pay for a day’s work.” Then in the mid-20th century, benefits including pensions, medical and insurance got added to the mix. Now, things that used to be bonuses, like …erm… bonuses, are part of a “compensation package.” I get it. I understand this. What I don’t understand is when a set “bonus” becomes an expected entitlement.

Do Incentives Actually Cause Failure? (4^th June 2012)

New research suggests the idea of an incentive is a good thing, but once employees get that idea in their heads it can, in fact, hurt their performance. There are instances where incentives can be good for a big goal or a long-term project such as hitting annual sales targets. But for day-to-day encouragement of employees, recognition is a better approach.

Your Total Rewards Investment Is a Waste, Unless… (17^th May 2012)

Do you have a Total Rewards strategy? Do you communicate your Total Rewards strategy to all employees in a way that gives them a true sense of your organization’s total investment in them? If you answered “no” to the second question, then by default the real answer to the first question is also “no.” No matter how well defined or constructed your Total Rewards program is, if your employees don’t know about it in terms that matter to them, then your Total Rewards strategy doesn’t really exist.

Productivity Stretched to the Limit: What Next? (7^th May 2012)

During the last several years, employee productivity sky-rocketed as employer actions taken during the recession forced longer hours, more work and therefore, more productivity from the average employee. But that can’t last. At some point employers will have to start hiring again to keep pace with a rebounding (if slowly) economy. And that time is now, according to the latest US productivity numbers. Click through to read about what you can do now.

7 Key Trends in Rewards & Recognition (25^th April 2012)

The Incentive Research Foundation recently issued a detailed report that compiles and categorizes research from 46 different sources into its “2012 Trends in Rewards & Recognition” report. In this post, I highlighted seven key trends below with excerpts and my own thoughts.