Best of the Force: Is the Purpose of Incentives to Motivate People?

Our "Best of the Force" series highlights some of the most popular posts from our archives.

Article after article tells us that we should halt our use of incentives because people aren't motivated by money.  Or because they are motivated by money, but to do the wrong things.

I can't help feeling that many of them are missing the point.

Many of the incentive arguments centered around whether or not money motivates people reflect a wrongheadedness about the role of and reason for variable pay.  This stems in no small part from the Deci/Kohn/Pink worldview that contingent rewards exist solely as bluntheaded instruments of control, as bribes, as a means of getting people to do things they would otherwise not be inclined to do.

I reject this point of view.  It suggests that most employees come in each day unwilling to do good work and unwilling to help their organizations succeed and applying incentives just exacerbates the problem.  I don't buy that.  While there are bad apples in every bunch for sure, I don't think it's true of most places and for most workers.

Where it is true, however, I would agree that incentives have little chance of producing any lasting positive effect.  Truth is, you have to create the conditions for motivation - trust, transparency, a sense of shared interest, good work systems, etc. - as a baseline before any reward is going to be worth the investment.  If your employees don't walk in the door each day motivated to do good work, you have problems that no incentive plan is going to fix.

I don't believe that the purpose of incentive is to motivate people.

I would suggest that the purpose of incentive pay is - in fact - to influence the efforts and choices of workers who had better already have a baseline level of motivation, by calling out top priorities, by guiding them to areas and activities where they can create the most value, by signaling the importance of collaboration through highlighting shared goals and the opportunity for shared reward, and by defining a form of partnership through which employees have the chance to share in the economic success they help produce.

Variable pay - incentives - will be an critical part of the compensation landscape going forward.  I am convinced of it. And not because today’s workers need to be bribed to do their jobs well.  Rather, it will be because a static, inflexible, unchanging reward package with no connection to the things the organization must accomplish to succeed is a distinct competitive disadvantage in a world as unpredictable and fast-changing as ours. 

Creative Commons image "Question" by Valerie Everett

Comments

[Paul Weatherhead]

In a purely economical sense, the purpose of variable pay is to provide smaller compensation when results are below expectations; and to provide larger compensation when results are above expectations.