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Do employee incentives really work? Finding the answer can be a divisive topic, especially with the debate over whether incentives really help create genuine behavior change. But in a recent Fortune magazine piece by organizational scientist Adam Grant, it is pointed out that many employers tend to give up on the practice too soon.
When designed right, incentives can have a powerful and positive impact on employee behavior. On that Grant and I strongly agree. Here are the top four factors to remember when creating an incentive program, and hazards to avoid.
Know what you’re getting into
It’s true that incentives don’t always create the desired outcome. But Grant argues that incentivizing performance can boost the volume of work performed by employees, though it might not always result in the quality of work leaders seek.
“My read of the evidence for performance incentives is that for the most part, they don’t undermine performance, but that reward is much more effective in motivating performance quantity than quality,” he says. “So, incentives may boost productivity to a much more effective degree than they promote creative thinking. In other words, maybe it’s easier to motivate people with incentives to work harder than it is to work smarter.”
If at first you don’t succeed, design again
Incentives should be treated as an experiment that needs to be tested, tweaked, and adjusted to fit varying workforces. “Too often I see companies that say, ‘We tried incentives, it didn’t work,’” says Grant. “No, you just designed a bad incentive.”
He offers two suggestions for leaders whose incentive programs are falling short. First, go back to the drawing board and think about what message you want to send employees through the incentive. Second, focus on testing to better understand what works. “If it works like you want it, great. If not, modify until you get it right.”
Mind the unintended consequences
The incentives you put in place to motivate employees may have an unanticipated effect, says Grant.
“They’re like taking a drug that hasn’t been fully vetted yet. A lot of people assume that incentives are straightforward—you reward the behavior that you want, you get more of it. You punish the behavior you don’t want; you get less of it.”
That’s an oversimplification, he says, but can cause issues with employees, especially when the idea of incentives in the organization is not clearly articulated.
Consider your message
Carefully consider your stated and unstated communication when it comes to motivating your team. The way the program or offer is explained will set the tone and direction of employee response – do they really care or is this just an inexpensive way to get me to perform?
Grant says it this way: “When we design rewards, we think a lot about the results we’re trying to motivate. We need to be at least as thoughtful around the relationship that we’re trying to build because every incentive sends a message.
“It can tell people that they’re just a means to an end, or it can tell people that we care about them.”
Smart businesses look for ways to empower employees, engage them in business goals and help them to make meaningful contributions. Our experts at All Star Incentive Marketing can help you create a comprehensive, well-designed incentive recognition and reward program that will develop stronger relationships and increase employee satisfaction throughout your organization. Contact us to learn more.