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Why Rewards Cause Problems #4: Rewards Ignore Reasons

Guest post by: Robert Whipple

Article Overview: Rewards administered with a heavy hand can feel punitive because they do not take into account the reasons why performance is at a particular level. This often occurs in Performance Management circles where the remuneration is locked in to a particular level. The attached article looks into this aspect of giving rewards.

Why Rewards Cause Problems #4: Rewards Ignore Reasons

Rewards Ignore Reasons

This phenomenon is easy to understand because most of us have experienced it in some form. Imagine that profits at your company were down in 2002 because you failed to create the right atmosphere for your employees and failed to hire the right people. You would get no bonus. You will be unhappy, but you can understand it because what happened was under your control. But, what if profits were down because your office was located in the World Trade Center and happened to be a pile of junk on September 11, 2001. You would still get no bonus. You can see the reason, but it definitely was not under your control. This feels very unfair.

The existence of incentives often lets leaders take the easy way out and fail to focus on critical things that need doing. Alfie Kohn writes, "..managers often use incentive systems as a substitute for giving workers what they need to do a good job. Treating workers well - providing useful feedback, social support, and the room for self-determination - is the essence of good management. On the other hand, dangling a bonus in front of employees and waiting for the results requires much less effort."

The antidote here is flexibility. One needs to test the sanity of a reward structure and make sure the prevailing conditions are at least acknowledged when administering the plan. When managers lock into a mechanical set of rewards that are applied without deference to the prevailing conditions, people easily get discouraged. Look at the rewards as part of a holistic program of recognition that makes sense based on what actually happened. If this means making some last minute adjustments to the incentive formulas to have them make sense to the population, it is far better to do that than to stick with a "plastic" application of incentives that ignore reasons.

The precaution here is that when managers manipulate the incentive formula on the fly, it can feel like there is something underhanded going on. If you do change the equation, make sure you document the change well and explain it thoroughly to all people. Failing to do this would result in a large trust withdrawal.

The protection here is simple, just stand back and look at your incentive scheme and ask if it really makes sense. If it does, then you are fine. If it doesn't, then you need to fix it before applying the rewards.

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Article Tags: motivation entitlement relationships problems Reasons control, pay, Punishment, rewards



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