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Incentive Programs: Manipulative Quick-Fixes That Destroy Employee Engagement

Oddly, in this “unmotivated” world, it’s difficult to find anyone who really is unmotivated. Whenever I ask someone if they are motivated, they say yes. Yet, everyone believes there are a vast number of unmotivated people out there, even though no one admits to being one of them.

This view is reflected by the fact that when a company is having a bad sales year, the management team instantly starts shopping for motivational programs for their salespeople. If production is down or product quality is poor, the first step on the problem-solving agenda is to blame lackluster performance on unmotivated employees.

Management seems to think that its key productivity problem is related to motivation−a fact that is substantiated by the $100 billion spent last year on incentives. This is a lot of money to spend on the solution to a problem that (according to employees) does not exist. If we all think we’re motivated; are we all wrong?Could we be unmotivated and not know it−like having a disease without any symptoms?

Sports coaches are admired because they are good “motivators. ”Some university coaches can earn $50,000 for giving a lunch speech to businessmen who are keen to hear the coach talk about how they motivate their players.But, if Notre Dame has a poor season, the casual observer immediately thinks that the team needs a new coach−one who can “motivate” the team more effectively.

Have you ever heard an athlete express the need for motivation? ”Yeah, we lost the game last night because we were unmotivated. ”It may sound absurd, but the prices of goods and services are increased considerably by the cost of so-called motivation− financial incentives, awards, cups, mugs, shirts, hats, travel, spot-cash awards–all of these and many more types of incentives increase the cost of everything we buy and sell.

So management spends billions on programs, gimmicks, and goods to motivate their employees who, when asked, deny the need for any of these things. Many more problems are hidden behind the motivational myth camouflage–the easy catch-all that quickly attributes organizational performance failures to employees “not trying hard enough. ”It’s a myth perpetuated by management since the beginning of the Industrial Revolution: if management can’t identify the cause of a problem, they blame it on lazy employees.

As it turns out, improper problem solving is the culprit here. The key to solving any problem is to first precisely identify the causal factors. Even the science of medicine did not make much progress until diagnosis (problem identification) became more accurate.Around the birth of Christ, for example,most people believed that diseases were sent as punishment from the gods. Treatments were aimed at pleasing the gods so that the disease would be taken away. Hippocrates believed the body had four humors: blood, phlegm, black bile, and yellow bile. If a person was ill, it meant that an imbalance existed in their humors and so they would take a treatment−such as having their blood sucked by leeches−to return the balance to normal.

The modern organization hasn’t been around that long, of course, but since its inception, management has made a similar mistake by identifying performance problems as the result of “poor motivation.”As mythical solutions go, this is a good one. You cannot see motivation, or count it, or take a picture of it. Hence, it’s an easy way to take the focus off of management performance and place the blame on the employees. Some people will argue that they can see motivation, when they really mean that you can look at performance data and if it is not to your liking, you can say that poor motivation led to low performance. So really, motivation is a mythical “something” that we pull out of the hat to explain why performance is poor. In an attempt to sidestep the blame for a plethora of performance problems, management came up with a perfect foil–the unmotivated employee.

The “motivation” problem has consumed more time and money than any problem in the history of capitalism. The incentive industry employs tens of thousands of people and generates billions of dollars in annual sales, so we know the root of their motivations. However, assigning performance problems to poor employee motivation has misdirected organizational problem solvers and delayed the identification of the real causal factors that seriously inhibit employee performance. Systems deficiencies, process malfunctions, job design problems, and nonparticipative management styles have been overlooked until recently because America’s management was too busy ferreting out the intricacies of the great motivational crisis.

Contrary to popular belief, when employee performance improves in the presence of small incentives, it is a good sign that the organizational system within which the employees are working is dysfunctional. The incentives are only temporarily causing the employees to circumvent and overcome the restraints that typically limit their performance. In dysfunctional organizational settings, incentive efforts can have a significant immediate effect because the discrepancy between employee performance and their potential to perform is so desperately broad.The gap between actual employee performance and performance potential is the widest when organizational systems and process problems have not been addressed.

The problems that incentive systems, motivational programs, and manipulative reward strategies create are, in the long term, crippling to an organization’s competitive functioning.Some negative effects of overusing incentives include the following:

Incentives become entitlements. Managers and employees become addicted to the constant barrage of doo-dads, baubles, trinkets, and award paraphernalia. The annual budget for motivational programs, speakers, and incentives becomes part of the corporate culture and employee compensation. Eventually, management can see no way to decrease the budget for merchandise and cash, because employees see these perks as part of their compensation.

Incentives weaken management skills. Why should managers and supervisors learn to facilitate employee performance or address issues that obstruct their performance when short-term incentives appear to do the job for them? This way, managers can abdicate their responsibility for developing their employees and leave it up to the “motivational” system.The core job of managers is to encourage employee engagement and effort through discussions about the work with the employee. Most managers believe that incentive systems and motivational programs negate the need to have meaningful conversations with employees about the work or to develop any relationship with them whatsoever.

Incentives devalue the customer, the product, and the work. Constant rewards for work behavior imply that there is no inherent value in doing the right thing for its own sake. The message is that one does a good job or improves because of the award at the end of the rainbow. As a result, employees do not engage with the company’s mission. Why should they

The mission is obviously not meaningful if the job is only worth doing for a T-shirt or a ball cap.

Incentives enslave employees. Meaningful work to most people is about the value of the work being done and about the feeling that they are creating that value through their own volition. Incentives indenture employees to toil for the next small prize or award. The employee, forced to accumulate points and scores to validate his or her extra effort, is driven by the next incentive in the queue.He or she soon loses the sense of personal accomplishment one feels when one creates something of value. Like a mercenary, one’s work is cheaply sold for the next bit of praise or reward that management won’t release unless that employee earns his/her share.

Incentives erode teamwork. In the midst of motivational programs, incentive initiatives, the competition for recognition, and the lack of any meaningful relationship with the organization, co-workers begin to compete against each other for merchandise and accolades. Mentoring and coaching become much less frequent.Sharing and support vanish. Performers strive to distinguish themselves from their co-workers; they seek to ensure that they are given credit for each and every achievement. Selflessness and the team spirit vanish, because the distribution of merchandise and other rewards creates a system of winners and losers.

Incentives destroy management/employee relations. In such an environment, managers seldom seek to coach or build relationships with their subordinates. They see employees as cogs in a wheel driven by the motivational machinery. This incentive machine depersonalizes the employees in the eyes of managers.Similarly, the employees see the manager as the handler coaxing them with the perennial dog biscuit in hand.The manager controls the distribution of goods, and as such incurs no positive regard from the employee.Employees resent being pulled back and forth like puppets by each new motivational program. They soon learn that when it comes to being recognized for a good job, there are many strings attached.
Incentives change self-perception. Selling out for merchandise does not increase self-esteem or enhance self-respect.The mercenary and the patriot see themselves very differently. The incentive frenzy has slowly erased employee commitment to the company along with loyalty to the customer and the product.

Unlike the short-term effects of incentives and rewards that must be continually innovated and redesigned lest they lose their novelty and impact, ongoing systems and process improvements permanently facilitate employee performance potential and strengthen the organization’s competitive capability. Over the last ten years, performance has improved significantly in those organizations that use participative management and problem solving to engage employees. These organizations encourage employees to identify and resolve the systems and process problems that restrain performance potential.

How would employees perform if their only encouragement was the traditional salaries, raises, bonuses, and promotions? Has the constant bombardment of merchandise incentives eroded the most valuable component of the worker’s self-esteem–pride in doing something well? Have the values that drove a strong work ethic been replaced with the instant gratification of trivial rewards? In the long run, the destiny of our economy and our global competitiveness will depend on the values promoted by our management practices.Doing something well and doing it right can remain an employee value.

Unfortunately, the management teams most likely to depend on incentive programs are also most likely incapable of or disinclined to identify and seek meaningful solutions to the organizational problems that limit employee performance. The strategic importance of management development has been overlooked and the easy gains of incentives have replaced management skills. Fortunately, the quick fix mentality that created the incentive industry is slowly being replaced by responsible organizational change tools and strategies. Many organizations are in the midst of shifting from incentive-driven to values-driven cultures. However, the easy gains temporarily obtained with merchandise and other incentives are difficult to relinquish entirely.Management still carries a cumbersome carrot on its back.

Most employees don’t want these condescending programs in the first place. They want respect and just recognition and reward for a job well done. Following are the initial steps to help an organization transition back to the traditional rewards−promotions, earned bonuses, equitable salaries, and worthwhile raises− for performance excellence: