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.
As the hiring outlook improves with anticipation of the new calendar year on the horizon, election dust settling and corporate tax liability gaining clarity, the talent exodus will begin in next few months.
Are you ready?
If your organization has not installed proactive mitigation efforts, you could lose your best talent over the next 2 quarters (in other words, if your not doing something now, you’re going to pay for it later). Successful recession recovery strategy should not ignore the critical variable of having the best talent on-board as well as engaging the “survivors”, lest ye not forget;
“High-commitment organizations outperform low-commitment organizations by 47%”
“Engaged employees are 43% more productive.”
The Hay Group
Our research shows that engaged employees can increase your financial position by almost 200% while disengaged employees can decrease your financial position by almost 25%.
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.
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.
I am too much of an analytic to play the Lotto much. The odds are just not there for me to spend my money on. I might as well take my dollar and throw it out the car window – at least that way, somebody might find it and get some use out of it.
However, while I don’t play much – on occasion I do.
It is on these occasions that I make it a rule to play a game that I call “The Lotto Game.” It involves spending time dreaming about what I would do with the money if I won. Would I go out and buy a bunch of things? Would I take a trip around the world? Give it away to charity?
I can spend hours visualizing what I would do with my millions. This way I feel that I am getting something for my money – the entertainment value of the dreaming.
Are there certain people who just can’t be motivated? Are there Wally’s who render the motivation fairy powerless? While I would like to believe that isn’t the case, I have to wonder…
Motivation is Personal
One of the core beliefs that I have is that motivation is very personal. People are individuals with different motivational triggers and drives. While there are basic underlying motivational drives (see 4-Drive Model), those drives impact each of us differently and create a unique motivational profile.
This implies that if one can understand that motivational profile of a person, one should be able to understand what to do to motivate them…right?
That is the implication…however I believe reality is a little different.
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 – note: there is also a lot of research on how this extrinsic/intrinsic effect can be mitigated) 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 Dan Pink has to say on the topic. However, this does not mean that these types of programs can’t be improved.
Successful organizations and leaders of the future not only need to focus on the optimization of extrinsic reward programs but also on moving other levers within the organization that can drive sales motivation. Using the Four-Drive Model of Employee Motivation (Lawrence and Nohria, 2002) provides a clear framework for how to do this.
Susan and I just had the wonderful pleasure of spending a day interviewing 11 people at Oak Ridge Hotel & Conference Center to try to uncover their secret – because they have gotten the formula right on employee motivation. Anyone who has ever stepped into their facility outside of Minneapolis can attest to the customer service mentality that every employee exhibits – from the front desk, to housekeeping, to the chefs, groundskeepers, and even in accounting. There is a definite difference in how the majority of these employees “show up” at their job everyday and how they view and take care of their “guests”. They are truly a company that is doing something right. While we haven’t had time to fully analyze the interviews (we will in the upcoming weeks), there are a few things that I can say definitively:
1. Leadership counts – the one overriding conclusion that hit us in the face was how important leadership is in this process – they need to be present, genuine, and focused on the right things.
2. Its not about the money – I was a little surprise to hear (actually to NOT hear) about bonus plans or contests or other recognition that had a big dollar value. It wasn’t important. It didn’t drive their day-to-day activities or play an integral part in their motivation.
3. It is about the team – teamwork was an overriding theme in all of the interviews that we did. It wasn’t ever about “my job” but instead about serving the customer. If that means that top managers have to change sheets, then that is what happens.
4. Genuine recognition rejuvenates – real, honest recognition that is done on a regular basis, in public, helps reinvigorate and help drive the culture. Knowing that their work is important and recognized keeps people engaged.
5. Its about people – employees were seen as people first. Management spent time getting to know them, getting to understand who they were, spending time finding out about their families and interests. They care and it shows.
Over the next few weeks we will let you know more about our findings and get in depth with some analysis. Oak Ridge Hotel & Conference Center has been kind enough to give us access to their people and allow us to share our insights with you. There is something to learn here if you are interested in creating a workforce that is motivated and engaged. Stay tuned!
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!
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