Many employers are enamored of financial incentives for employees, and in fact, incentives or commissions can be extremely effective motivators because most people need more money all the time and certainly we think of money as a way of keeping score.
But it’s not effective — certainly not for the long term — to wave “more money” around and assume that additional sales or better service or more productivity of any kind will just materialize without other significant effort.
Employees aren’t buttons that can be pressed to produce more, better, faster. They need to understand what’s in it for them and, perhaps more importantly, how to make the improvement happen — that is, how to do what is necessary to actually receive the promised reward.
Here’s an example of a new incentive plan going wrong. I learned about it when I was standing in front of an airport concession, eavesdropping. The italics are my commentary on what I saw and heard:
“Oh, we won’t be able to do this,” she says nervously. “We already missed the target for yesterday.”
“That’s not a problem,” one shirt says. “You can make it up today.”
Who are these guys? Does she have any previous positive relationship with them at all? Does she believe in their general competence? Trust in their understanding of how her job really works? They certainly haven’t given her any sense of context or shown any empathy so far.
What’s in the handout? Does it explain the actual performance requirements and how to meet them? The discussion has almost ostentatiously left out any practical message of what works or how to be successful.
“No,” the other shirt says. “You have till the end of the month to make it up.”
Even if you can make up a target you missed, how far behind can you get before there’s just no hope for the rest of the period? And will either of these fellows say anything reassuring, anything that shows they know what she’s dealing with? Maybe her colleagues are ineffectual. Maybe a more appealing competitor just opened 20 feet down the concourse.
Who prepped these people? Is this their first presentation? They’re talking about someone’s livelihood and they have nothing to offer that’s any more helpful, supportive — even understandable — than this!?!
A customer comes to the counter. The two guys back away, looking relieved. “You’ll see. It’ll work out fine,” one says, and they turn to go.
The entire interaction has taken less than five minutes. The woman shakes her head again, folds up the handout, puts it in the pocket of her apron, and waits, silently, for the customer to place his order. She neither greets him nor asks what he wants.
This is no way to hit sales targets, whether they’re reasonable or unreasonable. Why is this situation so pitiful, so tailor-made to backfire? The woman didn’t understand or accept the plan, and certainly didn’t see how she could make it happen. None of her overt behavioral clues (language, tone of voice, facial expression, or gestures) triggered any real engagement from the plan’s messengers.
Bad: Those guys expected the handout — the numbers alone — to do their talking, explaining, and motivating for them; what they got was the reverse. Neither of them explained how she would benefit or how she could achieve the targets.
Worse: The program wasn’t promulgated until it was already in force. Yesterday’s target was already blown. You can’t promise future rewards contingent on past performance unless you designate the past as automatically qualifying. Otherwise, the participants have no sense of control or efficacy — they can see they’ve been dealt a losing hand, and they assume you’re just trying to grind them for better numbers.
Downright awful: A new, potentially complicated incentive plan was explained during work — not just during work time, but on the job, during the work itself. The explanation, by definition, will be hurried and interrupted — or customers will have to wait.
And who knows if the targets were reasonably set in the first place? Not to mention the disrespect inherent in the way the program was communicated.
No wonder so many incentive plans don’t achieve the desired result — and instead, foster undesirable behaviors like padding numbers, pressuring customers, or holding over today’s sales because you need them in the totals tomorrow.
No wonder so many customers aren’t greeted by lively, energized staff.
No wonder work feels like a grind.
Amazing that in this case, it took less than five minutes to accomplish so much damage. If you’re trying to juice up your staff, be sure they taste at least a little sweetness to balance all that acid.
Onward and upward,
LK