Month: September 2009 (Page 2 of 2)

We are not rational beings…

Dan Ariely brings us research that highlights how we don’t always understand what it is that drives us or motivates us. If you haven’t read his book, “Predictably Irrational” I highly recommend it – go out and buy it now! I think the real insight here is how we as humans tend to believe that we are in control of our own behavior – that we choose our decisions based on rational decision criteria. As you will see in this clip, Dan shows how off we are.

This is important for us thinking about employee motivation because of the implications it raises. For instance, while I think it is important to ask people what it is that motivates them, we have to take the answers they give with a grain of salt – because they don’t always know. As I stated in an earlier post, we need to look beyond their answers and get at the underlying drives that move them. As with Dan Pink’s video, the power of this clip is in how it makes us re-examine what we think we already know. Enjoy!

More Pay ≠ More Motivation

How do you increase employee motivation? For many companies, it appears that they think it is done by just changing their reward systems. In their worldview, “more money equals more motivation.” I had one Regional Sales Manager tell me in an interview, “…if I could just get more dollars down to my reps, they would be fully motivated.” It often seems that companies view their pay plans as the only lever they have to use to impact employee motivation. This simply isn’t true.

Dan Pink, in the TED presentation he gave in July of 2009 (see post below), highlights some of the fallacies that focusing only on the pay plan can have. We agree with a lot of what he says. We know that pay is a vital part of a comprehensive motivational strategy but that there is more to motivation than just pay. Using the four-drive model we understand that there are other levers that can be used to improve performance. Companies need to expand their thinking and look at how they are creating cultures that improve employee’s ability to bond with their co-workers, managers and customers. Leader’s need to structure work so that employees are challenged and that they have an opportunity to learn and grow. Organizations cultures need to be enhanced so that workers feel like they belong to something worth defending.

However, we must also think about pay. The drive to acquire is a strong motivational force. I don’t know of many people that would do their jobs for free (however, I’m sure there are a few out there). I also know that most people would consider leaving a job they loved if they were offered enough money to go to a different job. That being said, more money in and by itself is not enough to drive significantly more motivation in the long run. Pay needs to be structured so that it is fair, it provides guidance around what the organization values (i.e., incentive pay focused on revenue is very different than one focused on market share), provide feedback to the individual about their performance, and allow the opportunity to satisfy the drive to acquire.

Much of Dan Pinks presentation (I’m anxiously waiting for his book) points to the negative aspects that incentives can have on creativity and intrinsic motivation. This is true. The alternative can also be true. Work by Eisenberger and Rhoades (2001) concluded that “how” the extrinsic reward is perceived by the participants has a significant impact on the effect it has on motivation. They found that when extrinsic rewards are designed to reward improvement or quality aspects of their work, their creativity improved. The important part then is not that incentive pay (or pay in general) is bad, but how it is structured and perceived needs to be well thought out to ensure that you are driving the right behaviors.

Kurt

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