Everything You Think about Pay for Performance Could Be Wrong
Posted on Tuesday, August 25, 2009 by Frank RocheThere’s a mismatch between what science knows and business does. — Dan Pink
I read this article about motivation on SwissMiss:
Career analyst Dan Pink examines the puzzle of motivation, starting with a fact that social scientists know but most managers don’t: Traditional rewards aren’t always as effective as we think.
The movie that’s embedded below can bring you up short if you think pay for performance is the way to go. It’s startling, actually. In it, Dan Pink talks about study after study that shows extrinsic rewards narrow creativity and impede problem solving. If you’re in the business of creating incentives for employees, it merits a look. (Yes, I know, I know…you all read Alfie Kohn’s Punished By Rewards and were totally turned off by that. Give this one a chance. Kick the tires. Let it sink in a while before you say all of it is wrong.)
Paul Hebert
Aug 25th, 2009
I’ve seen a boat-load of tweets and posts about this presentation and while Dan Pink isn’t wrong in his review of the concept – it can be taken out of context and misapplied by most management types looking for the next holy grail of motivation.
Key to his point is that in a “creative” endeavor incentives don’t work as well as not using them. I agree totally with that. However, there are still many, many activities that are individually task driven and can benefit from properly applied incentive activities.
Dan doesn’t make a distinction between poorly designed incentives versus those that are well-crafted. Anything poorly designed will be less effective than just leaving something alone. I can point to the Cash For Clunkers incentive that drove new car sales but reduced used car inventory (traditionally the market for the lower paid) creating hardship for the unemployed and poorer citizenry. I don’t think we should paint all efforts to align behaviors and reward effort with the same brush as his presentation seems to try to do.
I do believe the more we communicate direction, provide autonomy and treat people like adults we realize greater performance – especially in today’s team-based work environment.
Not unlike Kohn and his dismissal of all extrinsic incentives (although never tested in a corporate environment) – this approach has some application – but it’s not a blanket solution to all business issues.
That’s my story and I’m sticking to it.
laurie ruettimann
Aug 25th, 2009
“There’s a mismatch between what science knows and what business does…”
Whoa. This is awesome & interesting & challenging. Thanks!
Frank Roche
Aug 25th, 2009
@Laurie It’s a really great line, non? Really something to think about.
Doug Sayed
Aug 26th, 2009
Paul. I couldn’t of said it better myself, so I won’t try. Well done.
And Laurie, Whoa to you too. I thought it was fascinating as well(especially as a psych major as an undergrad).
Sarah Chambers
Aug 26th, 2009
Super provocative. I actually took notes! I completely agree that adults want autonomy. Autonomy and responsibility are what separate the adults from the kids. He challenges us to do more than talk to people like adults, and to actually treat them like adults.
Many years ago, a very clever colleague said that she never wants people to tell her both what to do AND how to do it. One or the other. To me, that’s an easy explanation of results-oriented direction.
I think a lot of feelings people have are well articulated in this 18-minute-that-feels-like-5-minute video. I’ve had this feeling that values and culture are the thing – not cascading task-oriented goals. I thought it was my idea. I guess a few smarter people thought of this before I did
AMP is cool too – autonomy, mastery, purpose.
Darcy
Aug 26th, 2009
Frank – Thanks for posting this thought provoking video. We put a post up at the Compensation Cafe to generate more discussion about the presentation.
http://compforce.typepad.com/compensation_cafe/2009/08/food-for-thought.html
Frank Roche
Aug 26th, 2009
@Paul I make my living on the pay for performance tightrope. I believe in it…but I’m going to process this idea more about the narrowing of creativity. It makes sense…it’s funny, managers are so willing to be amateur psychologists and then ignore other management science. It’s Management a la Carte.
Paul Hebert
Aug 26th, 2009
I think we need to look at this no differently than we look at any approach to business – it’s a melange not a single bullet. To say – incentives don’t work is as bad as saying incentives are the only way to get performance. Unfortunately for most companies and “old school HR” it comes down to what is easiest and what can I blame when it doesn’t work.
I don’t know why but it seems most managers want to simply implement an idea versus think about how it applies in their world.
Ken
Aug 26th, 2009
I certainly don’t dispute the main message. When I reflect on jobs I’ve had in the past, the ones that felt most rewarding had nothing to do with incentives that were offered. That said, the company I used to work for was sold for a LARGE pile of cash. If my reward for a decade of hard work had been fond memories of autonomy I’d have felt like a sucker.
Doug Smith
Aug 26th, 2009
It’s important to remember that there is still a LOT of work out there that is NOT centered on creativity, but on delivering a service that meets immediate expectations (food service, medical care, house painting, on and on) where Results Only Work Environment and Autonomy, Mastery, and Purpose may not work so well. While I’d like to believe that everyone would thrive with a focus on Autonomy, Mastery, and Purpose it just doesn’t feel that way.
That doesn’t mean that the conclusion is in on rewards — just that it is an interesting dialogue worth continuing.
Sean
Aug 27th, 2009
Really good article Frank, I was doing a search around Youtube today and found this movie: http://www.youtube.com/watch?v=kzCQ219bxl8
Thought it might generate some discussion around the new world of HR.