A new twist on the best way to get the most out of people comes in the March/April issue of Standford Magazine in an article entitled "The Effort Effect" summarizing the work of Carol Dwek and her new book "Mind Set - The New Psychology of Success."
I originally found this through Guy Kawasaki's blog. There is also a good discussion on Disorganizational Behavior. All three of these sources have great summaries of the concept so I won't go too deep but in short the concept is: If you believe you have a set intelligence level you will be less successful than if you believe that you can learn and grow. It goes on to say we can fix that mind-set through recognizing and rewarding the process of experimentation - attaching value to mistakes that move you closer to the solution. I continue to agree and have posted on the idea of rewarding steps versus outcomes (here and here.) MORE...
However, when I read through some of the comments on Guy's blog (I suggest you do) the conversation moves from the focus of the article (mind-set) to one of effort - of trying hard - not whether you think you can learn and grow. In addition some of the comments cite Alfie Kohn who believes that once you put an incentive in place to achieve tasks you damage the intrinsic motivation for the task. However, the author of the article highlights the fact that we should praise and reward learning and mistakes. Somehow during the comment thread the concept of a mind-set for learning increasing your chances for success moves to a discussion around too much emphasis on achieving and rewarding outcomes. As if one was wrong and one was right. I don't think these are mutually exclusive.
As a parent I definitely agree with rewarding and recognizing effort and the process of learning with my own children, but as a business person I don't have the luxury of waiting until someone learns something at their pace and then rewarding them for the process - regardless of the outcome. Business requires a more balanced approach. We need to create cultures and environments where results are respected and admired and where learning, experimenting are rewarded and recognized. Neither is unimportant and neither is the only important thing.
As a society we have continued to remove results from the equation and focus only on the process. This has created an environment where everyone gets a trophy, grades don't matter and people expect raises because they followed the process. Kohn has written a few books on the damage incentives and recognition do to children and it has been used as evidence that companies shouldn't have recognition and rewards in their compensation strategy. If you believe anything by Kohn I highly suggest you read Rewards and Intrinsic Motivation: Resolving the Controversy by Cameron and Pierce. It too has some issues as the Amazon review will tell you, but it does provide another perspective.
When looking at developing incentives and recognition don't let a single opinion on motivation drive your design. There is no unified theory of motivation... yet.