From oct 2010 my educational posts are published only on Pip

2 juni 2010

Everyone wants to be a rock star

So there is science indicating that financial bonuses not always work the way they intend to. Let’s say there is a team who needs to deliver something almost unachievable – a most uncertain profit, tripled user or ads sales figures or a huge amount of page views. The board and CEO have a wish, a requirement that is not fully corresponding to the reality, and believe that with a huge extra effort from the team, these goals might be reached. How to make the team want to offer this extra effort?

a) Offer a smaller sum as bonus if the set goals are reached
b) Offer a big sum as bonus if the set goals are reached
c) offer different sums as bonus to different positions
d)Challenge the team to with free hands within the concept and framework of the company, reach the goals.

Monetary bonuses can easily hit wrong. Everyone gets happy for an extra surprising bonus for Christmas according to the good performances of the year, but using money as a carrot is bound to cause problems.

Either the money suggested is not enough to care about. The sense of this will be more of a disappointment. It can even be insulting - Would I work extra for that small sum? Who do they think I am?

Or the sum is that big that doubtful decisions and strategies become a risk as the personal bonus is prioritized before the long lasting result of the product. I'll do anything to achieve the goals so that I'll get the bonus

As those decisions are made the entire organizations starts to doubt the leaders and the ground will start to rock completely.

Also as this research describes, big bonuses do not in any way help to give birth to great ideas. There are no changes in the structure of the creativity process in an organization when setting a financial bonus, and by that no more creative ideas will be born than the day before.

Big economical bonuses might make people work more hours though, desperate to reach the goals, growing a worry by time when the great ideas are not coming no matter how much of their time awake they spend on the company’s agenda. Even though all thinking capacity is focused on the matter no greater solutions are generated than before, maybe even a little less, as the employees get more and more tired. Finally they collapse, or realize that the balance between the job and the personal health has been far too scewed and that it is not worth it.

Different bonuses offered is of course a huge risk by itself as it is difficult to make it 'fair' to everyone and it can even make employees feel not worth as much as others, which will lead to complete apathy.

This is not 'fun at work' and it sounds somewhat true that employees who have fun at work are more productive than those who don't have fun at work.

Monetary bonuses = double failure if implemented for the wrong tasks and/or wrong employees.

I guess d) is the best option? I don’t know, I haven’t tried it, but I am convinced there are some important premises for the c-model to be successful.

Yes – Autonomy is the open structure needed for people to even want to think and create. It sounds as a great way for the employees to become one with the brand as they are the ones developing it and Yes – Purpose is a great carrot or challenge to let our minds focus on the right things.

Yes – the wish for Mastery is what driving most people to develop further. Everyone want to be good at and proud of what they do, but we also want to be rewarded for what we do, not only through mastery, but also through Recognition.

I don’t want to sit alone in my room playing my guitar for myself with no other listeners. I want applause!

We want to be seen. The organization setting the purposes must have a general known habit of letting the staff be the heroes. And this is not something you just say, but you reward them the best with further trust, free hands, raised salaries and public recognition.

People going to work today all want to be rock stars.

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