Performance Lever 6: Incentives

People 101: The consequences, incentives and disincentives, that follow everyday actions strongly influence whether those actions will actually take place again.

Whether the consequences that follow a manager’s behavior are intentional or unintentional, the likelihood that the behavior will occur again is increased or decreased.  This cause effect relationship can have subtle results.

Consequences may modify a current desirable behavior, create new undesirable ways of working that have delayed consequences, eliminate a desirable behavior or maintain the status quo.

When organizations or managers maintain a narrow definition of workplace incentives and ignore powerful but difficult to detect everyday consequences, it becomes impossible to align everyday consequences with desired performance.

Most workplace incentives or consequences are typically seen as having financial impact.  Observations would quickly reveal, however, that many consequences are a natural part of the way work is accomplished.

Powerful disincentives come in many forms including:

  • Shooting the Messenger: The messenger of bad news, difficult to accept information or perspective that challenge the status quo is the recipient of disapproval.
  • Unclear or Constantly Changing Expectations: Employees founder and lose motivation when expectation and strategy are undefined.
  • Flawed Systems: To avoid time-consuming or inefficient work, “workarounds” are developed.
  • Unproductive Conflict and Communication: These time and energy wasters create disengagement and extinguish the pride people want to have in their work.

When these and other incentives and disincentives prevent desired everyday performance, the larger picture of performance is compromised.

If incentives are to align with business results, a number of characteristics must be present:

  • Organizations objectively seek to understand information and perspectives contrary to their current view.
  • Expectations and direction are clearly defined and effectively communicated.
  • Systems and processes are fixed to eliminate the need for “workarounds.”
  • Effective feedback systems are in place so that impact on behavior is known and addressed.

As a review:

8 Levers That Drive Manager Performance

Performance Lever 1: Strategy and Goals

Performance Lever 2: Workflows or Processes

Performance Lever 3: Expectations

Performance Lever 4: Feedback

Performance Lever 5: Resources

Don’t miss the conclusion to this empowering Performance series being released next week, Performance Lever 7: Knowledge & Skill and Performance Lever 8: Capability.

Tim LaMacchio, Business Performance Engineer, Red Book Solutions

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