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 blunt-headed 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.
You have to create the conditions for motivation
It suggests that most employees come in each day unwilling to do good work and unwilling to help their organizations succeed. 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 an incentive is to motivate people.
Incentives = focusing on top priorities
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 their 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.
This was originally published on Ann Bares’ Compensation Force blog.