Tag: Four Drive

Repost: Expanding on Dan Pink – How to Drive Employee Motivation

Carrot - reaching for

[This article was first published in September of 2009]

It has been interesting how much attention has been paid to Dan Pink’s latest message on motivation that was presented at TED.  The number of tweets, blogs, and other messages about this have been huge.  We ourselves highlighted the speech here on this blog a couple of weeks ago (http://wp.me/pypb9-31 ).

What I find interesting and a little worrisome, is the idea that many are taking from Dan’s presentation that all incentives (or at least most) are bad.  I disagree 100% with that concept.   I would like to expand the conversation to explore why.

The debate about intrinsic vs extrinsic motivation has been going on for a long time.  The candle experiment presented by Pink was done in the 1950’s.  Deci & Ryan research from 1970’s and 1980’s suggested that extrinsic rewards can decrease intrinsic motivation.  Alfie Kohn wrote about how he thought extrinsic rewards were bad in “Punished by Rewards” in the 1990’s.   All of this research suggested a negative correlation between extrinsic rewards and intrinsic motivation.

However, that is not the only research out there!  Research based on both real life corporate performance data and academic experiments show a different side to this debate.

First, performance data from a number of sources points to an increase in performance when incentives are used.  Stajkovic and Luthans’ meta-analysis of 72 contingent based behavior programs found that money incentives increased performance by 23%, social recognition increased performance by 17%, and feedback increased performance by 10%.   BI, a performance improvement company, has shown increases of over 300% between a control group and an incentivized group in sales performance.

Those are hard numbers to ignore!

Also, Paul Hebert does a nice job of highlighting research by the International Society for Performance Improvement that indicate a 22% increase in performance for individual incentives and 44% for team based incentives – (see it here http://tiny.cc/nHfAj –  he also discusses some other arguments around Dan Pink’s message).

Second researchers have found that the way that incentives are structured has a significant impact on their performance as well as on the impact they have on intrinsic motivation.   Work by Eisenberger, Cameron and Pierce show that extrinsic rewards, if structured correctly, can actually increase intrinsic reward. They state, “The findings suggest that reward procedures requiring ill-defined or minimal performance convey task triviality, hereby decreasing intrinsic motivation. Reward procedures requiring specific high task performance convey a task’s personal or social significance, increasing intrinsic motivation.”  Specific to creativity, Eisenberger and Cameron “concluded that decremental effects of reward on intrinsic task interest occur under highly restricted, easily avoidable conditions and that positive effects of reward on generalized creativity are readily attainable by using procedures derived from behavior theory” [emphasis added].  Yet Dan Pink does not reference any of their work in his book (see here for some research articles that point to how extrinsic rewards can increase creativity: Eisenberger, Armeli, and Pretz, Eisenberger and Rhoades, and Eisenberger, Cameron and Pierce)

In our own work, we’ve seen that when individuals are given a choice in choosing levels of goals and subsequent rewards, they have an increased motivation to choose (and achieve) higher goals than what management would have given them.

That being said, Dan Pink has gotten the discussion flowing on this – which I think is very good.  He has also highlighted the fact that most organizations only see one lever to pull when trying to impact employee motivation – i.e. pay systems. As he points out, there are other aspects that influence employee’s motivation.  This is vital.  To improve performance, creativity, and accountability businesses need to look at more than just rewards!  I hope that this will help expand the use of other motivators!

Dan talks about Autonomy, Mastery and Purpose – these fit right into the Four Drive Model of Employee Motivation.  Autonomy and Mastery align with our Drive to Challenge and Comprehend, while purpose fit nicely with the Drive to Defend.  What Dan leaves out is the power that the Drive to Bond has on motivating employees.

Overall, I think the discussion that will result from Dan’s presentation is great, I just hope that it doesn’t get boiled down to the simple sound bite that “incentives are bad.”

UPDATE APRIL 1, 2011

Let’s start with the positive: Dan’s book has done very well and has helped focus people on the the need for looking beyond the pay system to help drive motivation throughout the business.  This is a very, very positive impact.

Now for the bad: the mantra that “incentives are bad” has been one of the larger themes to arise from the success of his book.  This is not a positive impact.   It has led to a number of non-experts jumping on the bandwagon expounding their personal belief that all pay-for-performance measures should be gotten rid of.  That incentives themselves are bad.  And that people will be 100% fully motivated if we can just figure out how to make jobs more autonomous, provide mastery and have a purpose.  Of course, this doesn’t really account for a lot of what really happens in the world as we know it.

Moving forward, I would like to propose that the discussion around this topic is good – as long as we look at all the research and at how incentives should / should not be used.  We need to look at all the tools in our tool belt – that includes things such as Mastery, Autonomy and Purpose – but also includes other things like rewards.

Let me know your thoughts – click on the comment section below!

Kurt

Repost: We are NOT rational beings so why do we try to make rational incentive programs?

Take the blndfolds offTake off our rational blindfolds…

Dan Airely, Richard Thaley, Cass Sunstein, Daniel Kahneman, Ran Kivitz, and many more psychology and behavioral economics  researchers have shown that while we like to think of ourselves as rational, thinking human beings who are out to optimize our well being, we aren’t.

In fact, we are very far from it.

Sharon Begley at Newsweek wrote this interesting blog “The Limits of Reason” in it, she states, “But as psychologists have been documenting since the 1960s, humans are really, really bad at reasoning. It’s not just that we follow our emotions so often, in contexts from voting to ethics. No, even when we intend to deploy the full force of our rational faculties, we are often as ineffectual as eunuchs at an orgy.”

We see this all the time.  I wrote about it in my earlier post from today “5 Lessons from the Maze.”  We tend to act and behave in very non-rational ways.  There are lots of irrational types of behavior and thinking and lots of theory’s about them (i.e., Loss Aversion, Status Quo Bias, Gambler’s Fallacy, Hedonistic Bias, Anchoring, Reciprocity, Inequity Aversion, etc…).

Here is what is interesting – we tend to still design our incentive programs and our motivational strategies based on believing that people act in a rational manner. We create programs that have 10 different ways to earn, with multipliers, qualifiers, and ratchet effects.  We create programs with multiple components and factors that we think will drive specific behaviors and elicit particular performance results.  We believe we know what people want and use only extrinsic rewards to drive our results.

Ouch!

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Rethinking the 4-Drive Model of Employee Motivation

I have been touting the 4-Drive Model of Employee Motivation since I first read the 2008 Harvard Business Review article “Employee Motivation: A Powerful New Model” by  Nohria, , Groysberg, and Lee.   It is a powerful theory on human motivation in general, and in particular, employee motivation.  First presented in the 2002 book, “Driven: How Human Nature Shapes Our Choices” by Lawrence and Nohria, the model outlines four main drives of motivation.

At the Lantern Group, we’ve been working with this model for almost three years now.  We’ve posted on it several times in this blog (see 4-Drive Model here, Impact on Leaders here, and other info here, here, here, here and here for just a few examples).

It’s  good – but not perfect.

Right away we realized that it needed to be tweaked.

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Finding Motivation – the 4-Drive Model of Employee Motivation

New slideshare.net presentation…hope you enjoy!

More on the Drive to Challenge & Comprehend

Why we do the things we do

I was reading an the transcribed copy from a conversation between Ira Flatow and Dr. Paul Bloom on the NPR show Science Friday.  This show was titled, “Why we like the things we like” and I think it highlights some very interesting insights that we could all learn from.

The following excerpt is a great example of the Drive to Challenge and Comprehend.

FLATOW: Well, you led into a topic I wanted to ask you about, and that is the pleasure of just learning about things. It’s – you know, just knowing more. I mean, I find that extremely pleasurable, and I’m sure a lot of our listeners do, or else they wouldn’t be tuned to this program.

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3 tips to increase the Drive to Bond & Belong

The 4-Drive Model of Employee Motivation’s second drive is the drive to Bond & Belong.  The drive is defined by our innate desire to form “close, positive relationships” with people around us.  The image of the lone wolf going it alone or the inventor holed up in his workshop are atypical – most people want to bond with others and feel they belong to a group.  Here are three tips to increase the B Drive: 

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The 4-Drives and Motivation at Oak Ridge Hotel & Conference Center

A few weeks ago Susan and I spent the day interviewing 11 employees at Oak Ridge Hotel & Conference Center  in Chaska, MN (see Oak Ridge Part 1 here).  We had observed that Oak Ridge had “gotten the formula right on employee motivation” and wanted to probe more to find out how.  From our original findings, we highlighted five things that stood out: 1) leadership counts, 2) It is not about the money, 3) It is about the team, 4) Genuine recognition rejuvenates and 5) It is all about appreciating people.  I’m taking a different approach this time, looking at it from the 4-Drive Model and seeing how each of the drives showed up in the 11 interviews.

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3 tips to increase the Drive to Acquire & Achieve

Four Drive Model

The first drive in the Four Drive Model of Employee Motivation is the drive to Acquire & Achieve. This is typically the drive that most organizations focus on when they are trying to find a lever to influence employee motivation.

However, companies often get too caught up in the financial aspects of this drive (i.e., how much of a raise can we give, what is our targeted incentive/bonus payout, etc…).

The following are three quick tips to help you think about how to impact this drive and increase employee motivation.

1. It’s not just about the money. It is so much more…This drive also includes the drive to achieve. Achievement takes on a number of different forms. Think about this in terms of grades – there is no monetary component to this, yet we are driven to try to get an A. In organizations, recognition is a very powerful motivator because it recognizes individuals or group achievement (kind of like a report card). Organizations can tap into the drive to achieve by focusing on ensuring that recognition is done correctly (e.g., timely, relevant, and appropriate to the effort/result).

Achievement is also about setting realistic goals that can be achieved. Short-term milestones are elements to use to help keep this drive up. One way to think about this is to think about the need to reinforce achievement on at minimum every 5 weeks. If you don’t have a milestones set up that fall within that time frame, you will tend to lose people. Make sure that you celebrate those milestones as well.  One thing that we are trying to get better at The Lantern Group is celebrating when a project or milestone is done. We get so caught up in the next project or next event that we don’t take the time to stop and congratulate ourselves on a job well done.

2. Add Some Perks. While we tend to focus on the big items like pay and bonuses with this drive, some of the more powerful levers that we get to pull are smaller “perks” such as office space, titles, parking spots, flexibility to work from home and other things that help satisfy the Achieve drive.

In addition, there are a number of small perks that also tie into the Acquire side of the equation, such as pizza Fridays, movie days, lunch seminars, discounts on classes, days off, foosball or pool in the office, employee of the month/quarter/year… You will notice that a number of these also contribute to the other three drives of Bond & Belong, Challenge & Comprehend, and Define & Defendsee also Four Drive Model

3. Improve your Total Rewards Communication. Too many times we’ve worked with companies that offer fantastic total rewards – not just their base salary, but their benefits, bonus programs, culture and recognition opportunities; however, no one at the company knows about these programs!  This is because they are outlined in a legal terms in a five different 50 page HR documents. It is vital that you market what you are providing to people in a way that will capture their attention and convey the big picture.That means that you have to overcome silos within the organization and market your Total Rewards as a comprehensive program that highlights the offerings from across the organization.

Also, make sure that your Total Reward communications are not just a one-time effort at the beginning of the year, but instead a campaign that highlights various aspects of your offering throughout the year and keeps people engaged and charged up.

While the concept behind these ideas is simple, the implementation of them isn’t always as easy. If you need help, please give us a call. We can help you work through the issues and improve your employee’s motivation!

Kurt

Let’s get sales incentives right

Salespeople who are engaged in their roles, who are motivated to succeed, and who’s goals are aligned with the organizational goals have been shown to have a significant impact on helping an organization succeed (Badovick, Hadaway, & Kaminski, 1992). Successful organizations understand this and try to keep their sales employees motivated and engaged through a variety of motivational methods – mostly involving extrinsic rewards. While much has been much written about how extrinsic rewards may have a detrimental effect of on a sales person’s intrinsic motivation (Deci & Ryan, Kohn, or Pink) there is little disagreement on the short-term impact that extrinsic rewards can have on a company’s performance. The short-term benefit of extrinsic rewards assures us that these rewards will be used in businesses no matter what Alfie Kohn or Dan Pink has to say on the topic.

It is important then that we get sales incentives right.  We need to ensure that as leaders, we are not limited in our thinking about how we can structure sales incentives and how they operate.   We must look at optimizing how our incentive plans are designed, the type of reward that is offered, and how goals are set.

Extrinsic Reward Program Structure

There is a very clear framework, based on the research that suggests that extrinsic reward programs should be designed such that the rewards are contingent on achieving increasing performance goals.  By doing this, companies not only limit the negative impact that extrinsic rewards can have an intrinsic motivation, they also increase the actual performance that extrinsic rewards drive.  This means that the use of non-contingent incentive rewards should be limited.  It means that incentive plans that are strictly “do this – get that” are not optimal.  Contests that rank people against one another also are not optimal as they only provide feedback that the sales person did better than the others – not against a goal.

Extrinsic Reward Type

The typical reward for performance is usually cash.  When surveyed, over 70% of sales people indicate that they would prefer cash.  However, there have been studies that show non-cash rewards (i.e., trips, merchandise) have a bigger impact on performance than cash alone.  This does not mean that one would replace their annual sales incentive programs cash bonus with rewards of trips and tv’s – but it does mean there should probably be a mix.  It should also be noted, that sometimes extrinsic rewards are based on fulfilling the drive for Achievement and as such, do not require significant outlays of dollars – recognition of performance by senior leaders can be a significant motivator for sales people.

Goal Setting

A majority of sales incentive plans have goals that are provided to individuals.  Goals are good – they have been shown to increase performance across a myriad of environments (see Locke and Lathum).  However, we’ve seen significant backlash against goals when they are not understood or felt to be so out of reach as to be laughable.  The negative impact of this can outweigh any positive motivation that you get from the incentives.  Goals must be understood and bought into (i.e., perceived as fair) to be effective.  There are a number of ways that companies can do this, but they often require changing systems and processes that have been in place for years.  The key is to get the setting of individual sales goals to be as close to the sales representatives as possible, while still ensuring that they align with the company sales objectives.  The science (or art) of this can be very daunting – but trust me, I’ve seen it done.  One simple way to help is to provide a means for front-level managers to effectively shift quota from one territory to another but provide mechanisms to ensure fairness.

Of course extrinsic rewards are just one piece of the motivational puzzle and shouldn’t be used as the only lever to drive motivation and engagement.  The key is to ensure that the incentives are right and that they do not detract from the other methods of motivation.

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