Expectations or Incentives

     Are Your Employees Not Performing to Expectations?  It’s Time To Find Out Why!

A new client said to me, "I have tried every incentive imaginable and the only thing I accomplished is divisiveness in my organization".  We have all heard horror stories about ill-designed incentives and the problems they create; however, this situation was different.  This client was trying to use incentives to get people to do what was already expected of them.  While that may seem strange, I can assure you that it is a common occurrence.

How do these situations arise?  Are incentives the appropriate answer?  If not, what should you, as business owners and managers, do to get the results you expect?  There are several reasons why employees may not be performing to expectation.  Here are a few.

Poorly communicated expectations

Most of you communicate your expectations, but the communication is not as complete as it should be.  One of the most frequently omitted pieces of information is the deadline (I’d like this by 10:00 am Friday morning).  Another component often missing from the communiqué is the "why" behind your request.  Most employees will rise to the challenge of the most difficult deadlines if they understand the project's importance.

Inappropriate priority decisions

As business owners and managers, you need to investigate an individual's workload prior to assigning new tasks and setting deadlines. If you assign additional work without considering the employee's current workload, the employee has only two choices :

• make the new task a priority and let everything else slide 
• let the new task slide

Either way the responsibility for assigning priorities is placed on an employee who typically has not been told "why" this project is important or what its relative importance is to the other projects he or she is expected to complete.  This creates a lose-lose situation for the employee.  Why?  Because they don’t have the same information you do.  The odds of their priorities coinciding with yours approaches zero. 

Another risk associated with letting your employees set priorities is that they typically do first that which they enjoy most.  It’s human nature!  Now what do you think the chances are of getting what you want in the time frame you want?  Nil? 

Lack of follow up

Every business owner and manager I know wants to assign work then walk away knowing that it will be done.  You don’t like to waste time following up, do you?  Of course not, but if you don’t follow up on the due date, your employees are going to make one of two assumptions about your request.  They are going to think that you are either building cushions into your due dates because you don’t trust them or flexing your authoritative muscle. 

  Either way, they resent having their schedules destroyed by management's whim, which is exactly how they view lack of follow up.  Yes, I realize that you have a zillion other things on your mind, but your employees haven’t run a business so they don’t understand the myriad of decisions you face everyday.   Another advantage of follow up is that the employees have an opportunity to receive more timely feedback, praise or constructive criticism, regarding their efforts.  This is the most effective way to minimize future disappointments for both of you.  This feedback mechanism is an excellent tool for creating behavioral changes that will allow your employees to meet more deadlines and minimize your follow up.

Unwillingness to use the axe

How often do you hear the question, "Why can't people just do what you ask of them?" You may have uttered it yourself.   Often the individuals asking the question are unwilling to terminate employees who, despite repeated attempts to coach them to better performance, consistently fail to perform according to expectations.  

If you truly want to minimize the time you spend following up on assignments, (NOTE: I said minimize, not eliminate), you must be willing to take appropriate action when your efforts exceed those of the employee in trying to improve his or her performance.  Failure to eliminate underperformers causes the remainder of the organization to migrate to that lower level of performance.  Every solid performer in your organization will eventually ask, “Who’s stupid here – the people who refuse to perform and still get to keep their jobs or me?”  The best employees will eventually leave because they know your organization isn’t going anywhere with these deadbeats blocking the way.

Now, I am not suggesting that you run out and fire everyone who has missed a deadline (you could be lonelier than the Maytag repairman).   I AM suggesting that you take those underperformers aside and let them know that you no longer intend to allow them to miss deadlines and performance goals.  That’s fair!  You are, after all, changing your operating policy.  Then, if they don’t come around, let them go.

Incentives

Incentives should be designed to reward exceptional performance.  A well-constructed incentive will reward the employee AFTER the company has benefited from his/her achievements.  I am a strong believer in incentives, but it is easy to make mistakes in creating these programs.  Here are a few design tips for you:

• involve employees in setting the performance goals – it creates buy-in for the goals
• make sure the goals are stretch goals
• create at least 3 or 4 goals so that the employees don’t become too narrowly focused
• establish firm deadlines for achievement of the goals
• create a simple feedback system so that employees can monitor their own progress
• weight each of the goals according to importance 
• make sure the employees understand and are aware of this weighting – this helps them understand how the incentive compensation will be calculated
• make sure you understand what the company’s gaining
• pay out only a percentage of that gain 

Additional tips

Let the employees know up front that as goals are achieved, new goals will become the focus of the incentive program.  They need to understand that the company’s success, as well as their own, depends on life-long learning and skill development.  The incentive program is designed to achieve these goals.

Don’t stay with a flawed program.  Once you and your employees determine that you have made a mistake, fix it.  They don’t want to waste their time and skills on unproductive efforts any more than you do.  Not only that, they know that if their achievements don’t produce bottom line results there won’t be any money to pay the incentive.

Finally, wear the employee’s hat.  Ask yourself, how can I abuse the incentive program that my employees and I just designed.  There are always one or two people who push the envelope.  If the risks are minimal, run with the program.  If not, revisit those aspects of the program involving the greatest risk.  Remember, no program is foolproof.

The right tool

Make sure that you are using the right tool for the job.  If you aren't getting what would "normally" be expected, use the stick (expectations), not the carrot (incentives).  If you want exceptional results, use incentives that pay after those results are achieved.

Copyright © 1999, Dale Furtwengler, all rights reserved