I2I - Incentive Intelligence

Santa Claus is the Reason for All the Bad Incentive Programs

I made an offhand comment on my post last week introducing the December episode of Influence Insiders blogtalkradio show.  I mentioned that Santa Claus managed the world's largest incentive program.  At first I thought it was just a throwaway line but the more I thought about it the more I realized that the structure of Christmas may just be the real cause for all of the poorly designed programs.

Before you call Bah Humbug on me let's deconstruct a timeless classic song that describes the "Christmas Reward" program.  

You better watch out
You better not cry
Better not pout
I'm telling you why
Santa Claus is coming to town

First of all the positioning of the program is all wrong.  Santa is focusing solely on bad behaviors.  There is little focus on the positive behaviors we really want to reinforce.  In other words, the program is really about doing NOTHING.  The best bet for participants (children) is to take no risks, take no initiative.  You are almost guaranteed to get some reward if you just keep your head below the log and stay out of sight.

He's making a list
And checking it twice;
Gonna find out Who's naughty and nice
Santa Claus is coming to town
He sees you when you're sleeping
He knows when you're awake
He knows if you've been bad or good
So be good for goodness sake!

Wow.  Talk about micro-managing.  Santa is watching every single thing you do.  How many of us perform well under these conditions?  Ever try to type with someone looking over your shoulder?  It's tough.  The best typist goes from a 90 words-a-minute whiz to a monkey with two hooks for hands under scrutiny.  Talk about pressure.  It's a wonder we don't have more kids OD-ing on Prilosec.

And think about it... this verse says he's ACTIVELY looking for problems - he's spying on you.  How'd you feel when you found out your company logs your emails and reviews them from time to time.

And what about the goals of the program "Be good for goodness sake!"  How soft can you get.  What does that mean?  How do you measure "good?"  Unless the criteria can be quantified you can't reward it.  Not only that - how many individual behaviors can be classified as "good?"  Too many for any participant to keep track of.  It's almost a given that every participant in the program will fail.  What kind of design is that?

O! You better watch out!
You better not cry
Better not pout
I'm telling you why
Santa Claus is coming to town
Santa Claus is coming to town    

And just in case you forgot... another verse at the end to really cement the fact that you are under the gun.  Not to mention, the repetition of "Santa Claus is coming to town" sounds eerily like the clarion call that goes out every time the CEO/Sr. VP visits the office.  Boy - don't forget his/her favorite bagel spread or you'll be washing all the Jags and BMWs in the heated executive garage.
 

So Here's The Point

Christmas may well be our earliest experience with an incentive program.  And it's a terrible structure.  It focuses on negatives, it micromanages your behavior, has too many goals and leaves no room for innovation.

And probably the worst part is that it isn't fair.  Even those kids that behaved badly still get presents.  I know my own experience was that no matter how badly I screwed up each year I still got something under the tree.  How does that help reinforce the "good" versus "bad" criteria?

If most of our leaders had similar experiences as me then it's no wonder the incentive programs designed to today aren't fair, rely on too many metrics and have poor criteria design.  

Blame Santa - 'cuz I know it's not my fault.

Show Recap - Influence Insiders & Incentives

Both episodes are available below. The Influence Insider  panelists on twitter: @annbares @frankroche @heathermargolis @leapcomp @toddhanson @incentintel

Taking a cue from Santa - the manager of the world's largest incentive program - Influence Insiders took on the topic of incentives yesterday in our 2nd monthly blogtalkradio show.  We had a pretty full house and some interesting conversation.  

I won't recap everything but the key points I took away were:

• Even with the ongoing negative press incentives get in today's business environment the panel's experience is that employers and marketers are not cutting back on incentives.  They are however, (and I like this) taking more time to do them right.  The opinion from the group is that companies are working harder to make sure that incentives are tied to business issues, are designed in a way to reduce unintended consequences and are adjusting and monitoring their incentive spend. 
   
• @toddhanson mentioned that the negative press on "extravagant" incentives has moved clients to look at awards that don't come across as too extravagant and are looking at other options such as charity to avoid negative impressions.
   
• @frankroche highlighted that base salary has been frozen and that raises are harder to come buy.  This is causing an increase in the use of variable pay.  From his perspective, this is requiring a greater degree of communication to explain how/why the changes are occuring for employees.  In addition, many employees who are new to a variable pay environment didn't understand that variable means variable.  Extra communication and training were needed to help managers explain that previous payouts are not guaranteed and the company was serious when they said "variable."
   
• @heathermargolis discussed the use of "marketing funds" as an incentive option for channel partners (co-op money, help with advertising, etc.)  That brought up the question of what is the analog to marketing development funds in the employee world?
  
  Should employees earn training, more work, more challenge?  Can additional responsibility be a good incentive for top performers?
   
• @leapcomp (Juilien Dionne) mentioned that there is more focus on MBOs in incentive programs.  However, @heathermargolis warned that in some instances, people who are too focused on their own MBOs may be roadblocks to others trying to get THEIR MBOs accomplished.
   
• We touched on Alfie Kohn and Dan Pink and intrinsic vs. extrinsic awards and caller "Andy" brought up the fact that the research cited has been based on children and other school-aged participants and in his experience, not really believed by many business practitioners.

And we closed out the program talking about how incentive programs, no matter how well designed need to be managed.  

No program can be designed, launched and operated without someone at the controls.  

Too often managers believe the program is a proxy for their active participation and management.  The key is to pay attention, monitor and adjust.

Thanks to all who listened - and will listen.  All of us at Influence Insiders appreciate your participation.  Don't forget to "favorite" us on the blogtalk radio site and to tell your friends. 

If there is a topic you'd like us to hit on let us know in the comments below.

That's a wrap!

Related articles by Zemanta

• Poor Program Design - Let Me Count the Ways (from a real program) (i2i-align.com)
• Sarcasm Alert - Rewards Are All that's Wrong With The World (i2i-align.com)

A hunting we will go...

By the time this hits your feed reader I'll be just finishing up today's Influence Insider episode:  Incentives - What Are They Good For?  If however, you get this link before Noon EST December 2, 2009 - listen in to the show.  Just call in at (646) 381-4430 and be part of the conversation.  It will be available for future listens and is downloadable.

But while I'm getting ready for the show - pop over to Fistful Of Talent and see our post on HR and Chasing Two Rabbits.  Add a comment and join the Influence Insiders at noon for our show.  Love to have you!

The Secret Motivation Program Your Manager Doesn't Want You To Know About

Psst... wanna know a secret motivation program?  One most managers will never run but is almost guaranteed to get results.  

You do?  Great... check both ways for spies.  You're not wearing a wire?  Check your buttons for hidden microphones and cameras.  Clean?  Okay... here's the plan...

1. Give your team a challenge to accomplish
   
2. Tell them why it needs to be done
   
3. Tell them a timeline for completion
   
4. DON'T TELL THEM HOW TO DO IT
   
5. Go on a 3-month sabbatical and don't check in with them

Yeah - I'm guessing 90% of the failure to engage teams is about managers telling people how to do things instead of focusing on the why.  In most cases people can figure something out if they know why it's important.  Managers typically spend more time telling people how instead of why.  Tell your folks why they do what they do and then get out of the way.

PS- Don't forget the Influence Insiders radio show tomorrow December 2, 2009 at Noon EST.  We really want you there!