Reward or Punishment - Don’t tell me you’re still doing THAT?

As a business owner who depends on the quality work of my team, I face the perennial question of, “How do I motivate and encourage my staff to do their best?” I try and do all the right things: I pay well, I offer encouragement, mentoring, and feedback, I focus on creating a fun and engaging culture that has at its heart our mission to show big thinkers with big hearts to make a big difference.

And yet even as a small team of three, we run the risk of falling in to the common reward/incentive traps that corrode culture lickity-split.

Let’s look at these common mistakes:

Mistake 1: Using extrinsic rewards alone.

Extrinsic rewards of the carrot and stick variety drive poor behaviour. Daniel Pink highlights the challenges of traditional management strategy in his book, Drive - The surprising truth about what motivates us. Targets can create performance anxiety and actually decrease outputs. Targets and rewards can also drive corrupt behaviour as people fudge the numbers to get their results.

Pink says that what is needed instead are the opportunity to get in to ‘flow’, (being able to focus on something one is passionately interested in), work that has meaning, and the ability to be independent and autonomous.

As the business owner, it is my job to help the team do the work they are best at, have the right resources to do it, and help them have a sense of development and progress.

Mistake 2: Making it about the money.

Whenever the boss raises the targets, it can feel like they are simply trying to line their own pockets. Disproportionate effort by the staff and reward mostly to the boss can create resentment.

Simon Sinek expounds that what sets successful companies apart is their ‘why’ - their cause, their beliefs. By simply making a bigger revenue target, we may be ignoring the bigger ‘why’ of the company. Biggertargets needto be tied directly to the overarching reason for the business. In our case, bigger revenue targets are tied to our intentions to serve more organisations and more leaders. We focus on building business so we can reach more leaders with our message of global consciousness and integrated leadership thinking. Revenue is both a symbol and reward of this work.

Mistake 3: Measuring people not systems.

Stacey Barr, performance measurement specialist, has a favourite gripe: organisations often default to measuring people, instead of the results generated by the people in a system. Focusing on targets and therefore individual performance, is a blinkered view of how an organisation actually works. There are many reasons why an individual might not be performing: the IT system keeps crashing and they can’t access their files, the stock-take was delayed because the stock-taker broke their arm on a ski trip, the accounting process is laborious and bureaucratic. And yes, the individual may be unskilled, lazy, or unsuited to the role. Why do we jump to the last conclusion first?

I recently hired an assistant and then let them go. Why? I worked carefully through the causes of the underperformance: some of them were due to our clunky induction process and systems, some challenges were due to the heat where she lives, some of it was due to her busy, distracting home office environment. We tidied up our systems and gave her a chance to operate within these, making allowances for the heat and a nagging cough.

Ultimately we decided she was not suited to a very detailed, process-oriented role. She would be much better off with simple back office tasks without deadlines. Unfortunately we did not have a role that matched her lifestyle, home office environment, and professional skills.

We changed the systems we could, and still found there was a mis-match.

How then should we approach rewards and motivation?

Daniel Pink says focus on the intrinsic motivators.

Simon Sinek says focus on being purposeful.

Stacey Barr says focus on the systems.

Here’s my suggestion:

Focus on the above, AND be collaborative while doing it. Success and reward at work should be a SHARED experience. Use these questions to focus you and your leadership team:

As a leadership team, share your individual and collective WHY. How much money do you want to make and why? What are the results you want to produce for yourself? For your family? For the staff? For the organisation? For the community? For the cause your business supports? What’s important to each from a lifestyle perspective? What do you value most at work? What irritates you and causes resentment? What does reward look like for each of you?

What are the systems that support and detract from the collective results you want to achieve? What are the results in the system that could be tweaked to improve overall performance? How can you make progress visible? How can you make each other accountable? How can you support each other if you are not getting the results you intend?

I would love to hear your thoughts! What incentive and motivation strategies have you experienced? What worked? What didn’t?