Incentive Compensation | Behavior Matters! - Part 4

Category: Incentive Compensation Page 4 of 6

You have more than me! Thoughts on fairness and 4 ways to make it better.

by Timblair

My four year old son was playing trains downstairs with two of his friends last week.  It was going great until one of the friends somehow ended up with 5 train cars while my son only had 4.  This sent my four year old into a tizzy in which he stomped out of the room and sulked on the floor in the kitchen.

“He has more than me.” was the response I got when I asked him what was wrong.

So trying to think quickly and forgetting that I was dealing with a four year old, I asked him if he had been having fun playing with four trains before he realized that his friend had five?  “Yes…but it’s not fair.  He won’t share and he has more.

My equally “way-too-old” for a four year old response was, “but right now you have none – which is more fun, playing with four or playing with none?” I thought I had him here….

He looked at me with a quizzical stare and held up his hand with all five fingers out – “Five!” he said in response with 100% conviction.  Ahh yes, I’m dealing with a four year old mind.

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A New Motivational Model Using the 4-Drives: Upcoming in 2011

Ok, this is a little bit of a teaser…we are in the process of doing a major overhaul of how we look at the 4-Drive Model.  We’ve talked about the need to update this model before (see here and here).  We are underway in getting that developed and should be launching it the first quarter of 2011.

Here is a sneak peak…the four main motivations as we’ve defined them are now renamed and constitute different elements:

1.  Personal Motivation- focus on the intrinsic motivators that we have and encompasses the Drive to Challenge & Comprehend

2. Reward Motivation- focus is on the extrinsic motivators that we have and encompasses the Drive to Acquire & Achieve

3. Social Motivation- focus is on the social drives that motivate us and includes the Drive to Bond & Belong

4. Passion Motivation (this name is still being hotly debated – but for now its what we are running with)… – focus is on the motivational element of purpose and passion – including defending one’s honor and tribe

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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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Survivor: Corporate America edition – Guest blog by Paul Schoening

Survivor “Damn Lucky”

Counter-intuitively, organizations tend to find difficulty prioritizing their employee engagement efforts during challenging environments. In fact, during this recession many have executed a status quo strategy, which communicates to their single greatest resource that you are “damn lucky to still be here”. Take a moment to think about this – has this been your organizations approach to engagement?

Therein lies the issue! If we tell our recession survivors they’re lucky to have a job and yet we label them our greatest remaining resource, we are sending mixed messages.

My Story

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Myths on communicating compensation plans…

Olivia Mitchell is one of the best experts on the web when it comes to presentations and public speaking.

She gets it.

I have been following her for over a year now and have been constantly amazed at the quality of her posts and her use of research to back up her statements.  In this post, she talks about three myths of public speaking – read it and let me know if you don’t change your mind after reading this.

After reading it, I started to think about how these myths often get in the way of effectively communicating incentive and compensation plans to people as well…

Myth #1: It’s not what you say, it’s how you say it

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Can Dilbert’s Wally Really Be a Top Performer?

I just had to laugh at the second clip in this.  Wally should be up for a very large bonus based on his analysis…

What is sad, is that many companies reward programs actually would reward this type of behavior.  Not failing is actually seen as a positive and rewarded.  This leads to all sorts of behavior that minimize risk and limit exploration.  Think about what this means for a company long term?  Think the type of culture it breads?  Do you think people really want to work in a company that rewards the Wally’s of this world?

Let us know what you think – leave a comment!

Are you Spock or Kirk when it comes to motivating?

You might motivate like Spock if you focus on…

  • Cash performance bonuses
  • Paid on multiple products/sales/behaviors
  • Complex plans since they are more fair
  • Use of thresholds, kickers, multiple payout levels
  • Use of goal based programs
  • Paid annually

You might be like Kirk if you focus on…

  • Non-cash performance bonuses
  • Paid on one or two measures
  • Simplified earning process
  • Use of simple multipliers
  • Use of ranking contests
  • Paid monthly

Other ideas on this?  Add a comment and let us know…

No Best Practice Quest Here!

I read “Sales Comp Demands a Deep Sales Dive, Not a Best Practices Quest” by Ann Bares on Compensation Force yesterday – the article really resonated with me.  The basic premise of the article is that companies should focus on understanding their sales force and not depend on best practices.  Ann states it best when she says, “the problem with the notion of best practices in HR is that it too often leads to a blind search-copy-cut-paste effort whereby we simply lift popular program elements (out of professional journals, books, studies, etc.) and implement them, without sufficient thought as to their fit and strategic applicability.”

It resonated because it is right-on but also because I just completed an assignment for a company where they were looking for “best practices.”

I didn’t give them any (we’ll not really – more on that later…).

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Awareness – how easy it is too not see

Yesterday I wrote about how we are not rational.  Today, we look at how sometimes we don’t even see things that are right in front of our eyes!  Take a look.

Did you see the bear the first time?  I know when I first did this test, I didn’t.  How long did it take you to notice the changes in the 2nd video?  I didn’t catch it until about 3/4 the way through and I was looking for it.

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The Story vs. The Analyst: How good communication gets ruined!

The largest part of our business is developing communications for sales incentive plans.  We create presentations, develop plan books, and design flash and other forms of communication. We got into this work by accident (one client many years ago asked us to create a “meeting in a box” for his IC plan – the rest, as they say, is history), but now we embrace it and have carved out a niche.  That niche is taking highly analytical and dry plan data and making it more interesting, more engaging, and more motivating for the sales representative.  Over the past 10 years we have done just this for thousands of plans and hundreds of thousands of participants.

We strive to tell a visual and emotive story with our work.  We work hard at capturing the vital information that is important to a sales person and making that information understandable and engaging.  I like to think we do a good job – when our clients allow us to.  You see, telling a story about incentive compensation and creating captivating visuals to convey that information isn’t easy.  It requires that we make choices about what information we share.  It means that we may have to simplify the message.  It may mean changing how we present and what types of communication that we use.  This, for some clients, is easier said than done.

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