Last week I wrote about how I have not kept up on my own goal of writing a book on achieving goals (i.e., change).
As mentioned, over the past two years I’ve been researching how people change. That research indicates that there are six major components that help people achieve purposeful change.
In reviewing my own lapsed change goal of writing five pages a week, I found that I had only leveraged two of those six components. Doing the math, that means that I was not doing four of the six. Those were:
1. Writing was not an emotionally driven goal – it was a rational goal
2. I had not established a habit around writing
3. I had not changed my environment to help facilitate my writing
4. I did not have social support network set up to help me
Last week I identified two of those six as easy fixes, one as moderately easy and one as very difficult. Here is my work to date on those:
My easy fixes (weren’t so easy):
4. Social support network. In response to this, I talked to my wife and asked her to help me on this by holding me accountable. She refused.
Even in the best of times, companies experience different competitive and environmental factors that can lead to organizational change and thus employee uncertainty. In hard economic times, those changes occur at a much greater pace and employee uncertainty can be even greater. Employee uncertainty creates a number of challenges for organizations as employees often feel anxious, disillusionment, disappointment, confusion, and even anger over their lack of control in an unknown situation. This often leads to decreased employee motivation, focus and subsequent decreases in productivity and performance.
Companies can employ a number of different mechanisms to help recharge employee motivation in changing environments. One key mechanism is the use of targeted incentives to help engage employees and focus them on improving productivity. Because incentives can be structured in a number of different ways and use a variety of reward options, it is important to understand what aspects of incentives will drive the greatest return given the uncertainty and emotional response that is felt by employees during these organizational shifts.
Understanding the psychological response:
The emotional response of individuals to potential negative changes is theorized to go through a process similar to grief. The Kubler-Ross Reaction to Change[i] cycle shows how employees typically flow through recognized stages when faced with change.
Initial denial is followed by resistance, then a period of self-doubt and worry, followed by a time of letting go, with acceptance of the change and exploration of options, and finally moving to new commitment and focus. This is an emotionally charged process that requires time to respond to change.
Organizations need to be able to manage this process and move people through these stages as quickly as possible. The engagement of the emotional elements of the brain is vital to being able to achieve this. During the high stress, denial and resistance stages, our brains do not process rational arguments as easily or readily as they usually do. In order to gain a foothold in this emotional cauldron, incentives need to have an emotional hook. Non-cash incentives achieve this hook through a variety of behavioral economic principles. First, they provide hedonic luxury escape which is about being able to remove yourself from the current state and imagine yourself with a luxury item or good[ii]. Second, they activate different sectors of the brain associated with visualization (i.e., right hemisphere brain functions) versus the more rational sectors associated with transactions (i.e., money and left hemisphere brain functions)[iii]. Third, non-cash elements do not push employees into a calculative modality in which they equate effort with monetary amounts. In stressful situations, this calculation is short-changed and often interpreted as “they are trying to bribe me.” Non-cash awards are evaluated as a separate, non-financial component that is viewed in isolation and not in factors that are associated with other compensation factors.[iv]
Many organizations have utilized non-cash incentives in periods of uncertainty and change. The following are just a few examples of these incentives and the results that they generated.
A technology firm out of Des Moines, Iowa was experiencing high levels of turnover and angst with its software programmers because of the uncertainty surrounding Y2K and how their jobs were going to be negatively impacted. A non-cash incentive program aimed at achieving specific Y2K milestones was implemented across the organization. AwardperQs (a non-cash point system) were awarded to individuals and teams that achieved specific milestones. This program provided clear focus and motivation for the software programmers and achieved in excess of 90% of employees engaged/ participating/hitting one or more milestones.
Sales Force Integration
A leading medical technology company was moving from a product-centered sales philosophy to a customer-centric team approach. This involved a realignment and adjustment to the sales force that created significant uncertainty in the field about their jobs and roles. A six-month incentive program was developed that rewarded people for sales that required integration of two or more product groups. A fixed award pool created a sense of urgency and engagement in the incentive. The client realized a return of more than 300:1 on this program.
A pharmaceutical firm was going through a major realignment of territories and product allocation due to a large product soon to come off of patent. Many sales representatives had new managers, new doctors and new products that they needed to work with. A short-term team based award was put in place that offered teams the chance to earn from selected merchandise if they were in the top 20% of districts across the nation. Quota achievement across the division came in above the stretch goal, even with the distraction of realignment.
Obviously there are other factors that influence how quickly organizations move their employees through angst to engagement in situations that are stressful or uncertain. While this paper does not expand upon those, two key factors that relate to incentives include:
Incentives should be short-term to allow for readily available goal progress particularly when dealing with uncertainty. By providing short-term incentives and tracking to that, individuals will achieve a sense of progression towards goal which increases the perception of certainty in the program.
Communication is key. Incentives cannot be viewed of as a bribe or they will be summarily dismissed. The tone and narrative of the communication needs to be set up to have the most positive impact and create a separate interaction with the incentives that sets it as different from the cause of the uncertainty.
[i] Kübler-Ross, E. (2005) On Grief and Grieving: Finding the Meaning of Grief Through the Five Stages of Loss, Simon & Schuster Ltd.
[ii] Kivetz, R. (2010) Rewards Hierarchy and Hedonic Luxury, presentation at BIW Forum
[iii] Jeffrey, S., (2006) Cash or Hawaii: The benefits of tangible non-monetary incentives, dissertation
[iv] Jeffrey, S., (2008) The benefits of tangible non-monetary incentives, Incentive Research Foundation
I found this summary of Lawrence and Nohria’s “Drive” and thought that it was a nice summation of the book. Josh Kaufmann does a nice job of laying out the key insights to the theory and some good ideas on how to apply the theory into the real business world. I really like the final comment by Kaufmann regarding adding a drive around “feel.” It is an interesting concept that I’m going to explore in more detail.
Our knowledge of the Four-Drive Model of Employee Motivation is constantly being expanded as researchers study it and organizations work with it. This is exciting because it allows us to use this theory more effectively to drive performance and increase employees motivation.
Recently I have been in contact with Kristen Swadley, a student at Missouri Southern State University. Ms. Swadley has added to our understanding of Four-Drive Model by conducting research to see if demographic differences such as age, gender, marital status, tenure, income, job role, or education level impact any of the four drives. Analyzing data from 315 surveys, Ms. Swadley found some interesting findings that point to both the robustness of the Four-Drive Model as well as how specific demographics correlate to some of the drives.
The following information is from the thesis she completed around this study:
Regarding gender the analysis showed that there was no difference between males and females in their tendency towards a particular drive. Thus the four-drive model does not have a gender bias.
However, there was a relationship between the age of respondents and the drive to defend – older participants (over age 41) showed a higher correlation with the drive than the younger age (under 25).
The drive to defend was also found to be higher in married and divorced participants compared to those who listed their status as single.
Tenure showed a correlation only with the drive to bond where unemployed individuals rated that drive significantly less than those who were employed (specifically, those employed for 0-3 years and over 12 years – which is an interesting fact in itself).
Income levels showed a correlation between both the drive to bond and the drive to comprehend. Those individuals who earned under $19,999 placed a significantly lower value on both these drives than those in the higher earning brackets.
There was a difference in the drive to comprehend between various work roles. Specifically, there was a difference in how both middle management and trained and professionals viewed that drive compared to skilled labor (with middle management and trained professionals placing a much higher significance on it).
Unsurprisingly, educational level also showed a correlation with the drive to comprehend, with those participants who had achieved a graduate degree valuing this drive much more than those with just a high-school degree or some college.
This information helps us as leaders start to understand how we can better use the levers we have to motivate our employees. Ms. Swadley puts it best when she says, “While it is true by the tenets of the Four Drive Theory that all humans are motivated in some way by the four basic drives, it is important to take into account that all employees are motivated by the four drives at differing levels. A manager with the intention of implementing the Four Drive Theory in the workplace should have employees tested to find out which of the drives are most important to the individual on down to which of the drives provides the least amount of motivation.”
We hope to have Ms. Swadley right a guest post in the upcoming weeks to explore a little deeper what her findings mean for managers and leaders – until then, please let us know what you think by leaving a comment. Thanks!
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.
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
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.
Increasingly we are seeing data that engaged employees drive business success. As the economy recovers at the current snail’s pace, companies are also looking at their employee engagement scores deciding they’d better do something about it now before wholesale exodus occurs by their greatest resource.
Proactive talent managers planned for this factor 3 years ago.
Where are your engagement planning efforts at currently?
Just this week, another study was released by The Brand Union, a brand strategy and design consultancy. This recent study surveyed 680 U.S. professionals revealing emotional engagement outweighs other forms of employee interaction, offering critical insights for executives who want to improve employee engagement health and create business efficiencies during lean times.
How boring would this world be if we did not have imagination? How limited would our opportunities be if we couldn’t dream? I am grateful for the fact that we have an imagination – one that can inspire us or grant us a few moments of escape. I am grateful that others can share there imagination with me and I’m better for that sharing.
What are you grateful for today? Click on “Leave a comment” below and tell us.
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