Incentive Intelligence

A little help from my friends...

I'm in the process of putting together a presentation to the HR department for a fairly major client with many thousands of employees.  They are interested in the "state of the world" relating to how best to influence their employee audience.  They have some things in place to drive engagement but they're interested in an "unbiased" view of what's going on.

I've positioned the meeting as an education seminar - not a sales presentation.  My goal is to provide them with information surrounding:

• The changes occurring in the employee population domestically and internationally
• The technologies that are influencing the way in which employees interact and engage with each other and the company
• The need to understand where they currently are - their employee "map" so to speak
• The strategies and tactics other companies are using to address their employees today and in the future
• How to put together a plan of attack for gathering the appropriate information from their management and from their employees to establish starting points and gaps
• Their possible next steps

In order to provide a more rounded view I thought I'd reach out and see what the readers of this blog think.

So here's my question to you all....

"In your opinion - what should HR Departments know, or be cognizant of, as they put together their "to do" list for the future?"

Don't feel like it has to fit into what I've outlined - this is an "all-skate" - I'm more interested in the opinions of the many intelligent folks who read and respond to this blog than I am in validating my approach.  I don't need the answers as much as I need the questions - what should HR be worried about?

Here's my promise to you for participating...

If you respond - I will:

• Create a post on this blog about the process and the input provided with links back to the appropriate site
• Create a "generic version" of the final presentation and post to this site for your use if you find it interesting and valuable.

Your opinion by September 7 would be greatly appreciated.

Thank you in advance for any consideration.

Competitive Juices

With apologies to Alfie Kohn - competition does not stifle motivation. 

I know he has studies, etc. that "prove" competition decreases intrinsic motivation - and there may be some truth to the studies he's been involved with or analyzed.  However, sometimes the real world  provides evidence that places doubt in the results.  That happened to me today. 

Kris Dunn writes the blog HRCapitalist.  His post today lists what he calls the "HR Blog Power Rankings."  For those of you that don't read Kris's blog I urge you to subscribe.  The blog is a great source of intelligent and timely HR commentary.  His blog is listed on my "Other Intelligence" list to the right.

His post today lists his "top 25" blogs relating to HR.  Shameless plug - Incentive Intelligence made the list - number 19 (with a bullet!)  But that's not my point.

Here's my point.  The mere fact that he ranked his favorites influences the people on the list - and anyone who wants to get on the list.  In fact, my very first thought when seeing the list was... "I've got to do some work so I can move up the list - I want to be in the top 5 at least."  My behavior will be influenced by the competition.  It is a friendly competition.  But competition non-the-less.  If I fall out of the list - (fingers crossed I don't) I won't stop blogging.  In fact it will motivate me to think harder, post better, etc. 

In addition, one of the first comments on the post  said the same thing - "...If we make the grade in future (and we hope we will)..."  In other words, just doing the ranking influences the behavior of those being ranked (as well as all the wannabes who didn't get any mention.)

And Kris did this right...

• First of all Kris has created a blog with value and therefore immediately has credibility when doing the rankings.  If he was just some schlub with a blog - it wouldn't matter - but he has authority (read his bio)
• He listed the criteria up front - told you how to achieve the goal
• Listed those that made the cut and provided a ranking number - giving a relative standing
• Listed those that didn't quite make it but were still valuable - providing a pool of potential listees - and providing recognition for their effort increasing the scope of influence.

And for you psychology fans - all these elements fall into Dr. Cialdini's (my influence soul-mate) list of things that influence behavior -  Authority, Social Proof, Liking and Scarcity.

Kudos Kris!  Great job!  (and thanks!)

It really is who you know...

I love the idea of social networking.  I think social networking - if implemented correctly - can change how companies, attract, retain and engage their employees, as well as their distribution partners and customers. 

No big news there - pundits have been saying the same for a while.  I have blogged on social networks and their impact on companies back in 2006. and included social networking in a white paper written in 2005.

Dow Chemical is now using social networking to bridge the gap between current employment needs and past and current employees.  The article that brought it to my attention is here on Computer World.

From the article...

"This is an acknowledgment that the labor market is tightening," said Kevin Small, leader of Dow's Global Resource Management Center. "We really need to come up with ways of addressing different generations in the workforce. The intent is to increase engagement with the overall Dow family -- current and former employees -- and allow them to stay connected [and] stay current on what Dow is doing in case they choose to return."

I think this is a great way to expand the reach of Dow's recruiting efforts.

One thing I'd include is a program whereby former employees can recommend people outside the network - to "link them in" so to speak and earn rewards for continuing to look for people that they believe work within the culture.  The recommending employee would receive credits/points - like "diggs" and so would the person being recommended.  Other employees could then rank the potentials driving up their "desirability" score.  I'd also close the loop and show scores for employees based on whether their recommendation made the cut - and include multipliers for length of stay for the new employee.

Imagine being able to go to a site and see your score compared to others. 

The bonus in this idea is that those that participate are probably your target audience for ongoing employee engagement ideas since they are proving, through their behavior, they are actively engaged and helping the company. 

A ready-made audience for understanding what you're doing right and what you're doing wrong. 

Win-Win-Win.

Your Nexus of Value

Ever read a post that makes you go ... "hmmm... there's something in here that I need to respond to -  there is something gnawing at me but it's still too amorphous to put on paper (screen?)"

That's how I felt when I read this post from Kevin Hillstrom who writes the MineThatData Blog.

Normally, I'd take the time to try and craft a cogent response.  I'd edit and re-edit to make sure it flows well and actually has a point.  This time I'm going to try something different.  I'm going to go with stream of consciousness.  I'm just going to write what comes out of the fingers and hope it makes some sense and adds some value to the conversation.

The post is entitled "Self Actualization and Tribes."  My interpretation of the post is that each of us is a member of a tribe, typically based on our organizational attachment (usually our functional department or role in a company) -  and each tribe has its own ways of reinforcing membership. In addition, I think, the post hints at the fact that the tribe provides greater reinforcement and recognition than one gets from the organization from which the Tribe springs. 

Loyalty is now to the Tribe versus the organization.

To quote from the post...

"Within the tribe, you feel loved, you feel welcomed. You exchange ideas, you learn. At conferences you go out for fancy dinners. Vendors host evening parties with free mixed drinks. You feel valued. You have a connection with "like-minded people". You give awards to those who excel at the work done within the tribe. There's recognition.

Compare all of that with what you deal with in your own company. When is the last time your company made you feel the way your tribe makes you feel? Did you formally celebrate last year's scintillating 9.4% record pre-tax profit performance? Did you receive a promotion, or recognition? Or did you get a 3% cost of living increase?

Boomers dominate Director, VP, and C-Level jobs. They aren't going anywhere anytime soon. As a charter member of Gen-X, I've repeatedly observed how my generation is stuck in idle. Companies struggle to provide a reward structure for employees trapped behind tenured leaders."

Boy - is that a great description of what is occurring in many organizations today.

The Tribe is supplanting the organization as the nexus of value.  This is a critical issue for companies who wish to weather the coming workforce storm everyone sees coming. 

Kevin ends his post with these questions...

What impact does this have on the businesses tribe members support? How can a brand meet the needs of an individual employee choosing to express himself/herself through a tribe? Or does it even matter anymore?

And think about the leadership opportunities for the individual who can unite all these tribe members, creating a high-functioning team within a business? That's where the real opportunity exists.

Why can't that person be you?

The questions are good.  How does a company balance the loyalty issue if in fact the nexus of where I feel valued has moved away from the organization? 

Here's my take.

As the leader of the organization the first thing you should do is recognize the reality of the situation.  Leaders must publicly admit they understand that the nexus has shifted and encourage their employees to be a member of a Tribe - find one that fits their values, believes, desires.  The leader should establish funds to ensure that Tribes have the time and resources necessary to meet, collaborate and transfer validation to their members.

In other words, I would market to the Tribe - and outsource the reward and recognition to the Tribe members.  I would "enable" the Tribe.  I would celebrate the different Tribes.  I would create reward and recognition programs that reinforce the Tribe and Tribe membership.

The one thing I wouldn't do is what most companies would initially try to do - rein it back in.  Control is the opiate of a bureaucracy - and a very powerful one.  If new media and new technologies have shown us anything it is that control is moving away from a top-down model to a networked one.

As the leader I would reinforce the network.  Move my span of control up a notch to the Tribes and let the Tribes worry about their members.

How many leaders would be able to admit they don't have control - and look for way to enable less control?  That is the question for the coming years.

Short-Term Wins Are Critical

From Friday August 17 - this blog post from Fortify Your Oasis.

The post talks to the fact that learning goes through stages.  And those stages require effort and in some cases - I'd submit - some embarrassment.  Within the post was this chart -

Two things came to mind as I looked at this chart.

First, the "step up" image is a good one.  It takes effort to learn new things and the idea that you need to "climb" to get to the top is apt.

Second - because there is effort there is a need to provide incentives to take the individual steps.  Creating short-term reasons to submit to the work, the pain and the possible embarrassment as you move from Step 2 to Step 3 is critical.  We need to ensure there are very visible rewards and recognition for achieving these steps in order to get people to move toward the goal.

It reminds of discussions I have with my kids about the stuff they study in school.  The comments are typically - "I'll never use this."  Or, "How will this ever help me with 'x' job?"

Good questions.  Typically, the payout for leaning and mastering a new skill is somewhat hidden.  It is difficult to show how the new competence will manifest itself in your current position, role or job.  This is especially true of top performers.  They cannot see the long-term reason for changing.

Give them a reason!  Provide rewards and recognition for each step of the process.  It's okay to have them focus on these short-term goals.  Once they master the new skill - they will see the big picture and be thankful they stayed with it.

Without short-term wins - it is hard to keep people motivated to achieve long-term goals.

Know your audience...

The newest college mindset list from Beloit College is out.  The purpose of the list from their web site:

Our effort is to identify a worldview of 18 year-olds in the fall of 2007. We take a risk in some cases of making generalizations, particularly given that our students at Beloit College for instance come from every state and scores of nations.

The "Class of 2011" refers to students entering  college this year. They are generally 18 which suggests they were born in 1989.

The list identifies the experiences and event horizons of students as they commence higher education and is not meant to reflect on their preparatory education.

                   

I've posted here on this before.

Couple of the more interesting points on the list...

• They never “rolled down” a car window.
• Pete Rose has never played baseball.
• Stadiums, rock tours and sporting events have always had corporate names.
• High definition television has always been available.
• MTV has never featured music videos.
• The World Wide Web has been an online tool since they were born.

A lot of the other items on the list were kind of ... "oh yeah..." but not really eye-opening.

What is more applicable to people in the business world is to take a look at the Mindset List for those that are graduating this year.  Those are the folks that will be entering the workforce.

Some of the items from that list included:

• Computers have always fit in their backpacks.
• There have never been dress codes in restaurants.
• They have always been able to make photocopies at home.
• Stores have always had scanners at the checkout.
• They have always had a PIN number.

Think about some of the things on this list. 

If you, your company or your industry, are not connected via the web, use the internet for daily activities, worry too much about what dress is appropriate for business, don't have the best technology available to everyone whenever they need it, and aren't constantly look for ways to streamline processes with technology - you are going to disappoint your new crop of recruits.  This is what they have known their entire lives.  These are their minimum standards.

Good luck!

Choosing to Change

One of the most interesting aspects of behavior change - and being in the business of helping companies create that change - is that we're dealing with human beings that have the ability to make choices.  When a program is designed to shepherd behavior toward a specific goal we try to provide the appropriate behavior triggers that will elicit the response we want.  As a side goal, we try to design the initiative in a way that not only drives behavior but makes the target audience happy about the change - makes them a part of it.

I don't normally use cartoonists for ammunition and inspiration for this blog but sometimes it just feels right.

Scott Adams of Dilbert fame - has a very interesting blog (you should subscribe if you don't) that touches on a lot wide-ranging issues from God and free will to decision making and how to be funny. 

The other day on Scott's blog he had a discussion about the power of choice.

Scott basically says that having choices put you in control, and control = satisfaction.  To quote the post:

"We know from workplace studies that the biggest factor in employee satisfaction is the degree of control workers have over their jobs, assuming other factors such as the pay and the hours are somewhere in the normal range. People like choice more than they like the thing they choose."

The rest of the post goes on to provide examples of where a choice is less than optimal but still we think it is a better choice - simply because we controlled the choosing.

This is important when designing a program to influence behavior.  People can choose to follow the path you've laid out, awards and all, or choose not to.  Designing the program correctly means we have to offer people choices in the process - choose this and get "X" or choose the other and get "Y." 

Both options will advance your cause - change behavior.  But the mere fact you gave your audience choices means you given them some control which in turn will drive satisfaction with their choice - and satisfaction with the behavior change.  This also ties into my post from Monday on getting your target audience involved.  Same idea.

Next program - provide options to participants for behavior change.  This is especially important if your audience skews younger (more Millennials/Gen Y.)

Great Question

Frank Roche of the knowHR blog asks a very insightful question on this post...

Why is it that the same managers who use “people don’t work for money” to justify underpaying workers are convinced that their own bonus and long-term incentive plans are great and highly motivating?

I have an opinion as to why.   First of all I don't think they use the excuse to justify not paying bonuses, it's just that it is too expensive as you move to a level where you have a lot of employees.

Money becomes a motivator when the amount is motivational.  Too little and people think of it as a hollow effort and an insult.  Too much and it's obscene.  (See this post - which I also found through knowHR blog - if you want to see pay disparity obscenity in action.)

Managers can get bonuses in the form of compensation because the math works.  Let me walk through an example.

Assumptions:

• Manager makes $100,000
• Each employee under his/her management control makes $75,000
• Manager has ten (10) direct reports

If we wanted to give each person on the team a monetary incentive it would have to be approximately 3-5% of base annual salary (rule of thumb) to get any attention and be seen as worthwhile.  And remember, the tax man cometh on these bonuses - so no one actually realizes the full amount of the bonus. 

Let's just use 4% for the example.  In order to get the employees attention we would have to give each one $3,000 in bonus (of which they would realize about $2,100 after tax.)

Times 10 people that is $30,000 cost to the company.

Now - 4% of the manager's income would be $4,000 - enough to get their attention and $26,000 cheaper for the company.  This post I did a while back shows the concept with a graphic. 

Therefore, it's not that management consciously decides that money is better for managers than for the rank and file it is simple math - it's cheaper for the company - and possibly just as effective.

Now the real question is - going back to the ridiculous multipliers we see relative to CEO vs. rank and file - at what level does it makes sense to stop doing this.  In effect, huge CEO bonuses are communicating that the CEO actually has impact on the lowest level in the pyramid.

One thing that this makes me think about is that as the hierarchical organizational structure of  past starts to crumble - will more targeted incentives to the "doers" become more prevalent since the amount of influence top management has on work flow and output begins to wane?

Trifecta...

This post on the Brains On Fire blog uses a Native American saying to highlight how involving customers in the brand is the most effective way to "market" brands in today's consumer driven world.

I agree but with a little twist.

The quote is: 

“Tell me, and I’ll forget. Show me, and I may not remember. Involve me, and I’ll understand.” -Native American Proverb

The author Spike goes on to say that the best way to engage a customer is to involve them.  He doesn't say it explicitly but it seems he's saying that you should jump directly to involvement.  I would suggest that in order for involvement to work you really need all three.

Tell the people (consumers or employees) what your goals are.  Demonstrate (show) them what that looks like.  And finally, ask them to improve on it (involve.)  I would suggest that without the first two steps, you're asking for input and connection without context.

Employees, consumers, channel partners, all need context for the discussion.  Just opening the doors for input creates a lot of noise - making it more difficult to separate the important signals within the communication.

What we all want are consumers and employees that understand and participate in the process. 

What We Say VS What We Do...

Many times what we put down on paper is very different than what we actually do in real life.  Think about the last time you updated your resume.  Be honest... how accurately does your resume reflect your true impact and your true capabilities.  Just a little spin?  Just a little "interpretation" of your results?  You know what I mean.

This thought occurred to me when I read this post on 800-CEO-Read about a new book called "Giving Notice" by Freada Kapor Klein due in October.  The post highlights some interesting statistics on why people leave companies.

Ever since I read "The Halo Effect" I look at research with a bit of a jaundiced eye.  I think people respond to questions on surveys in a way that is different than the way the act in real life.  Specifically, in Klein's research for the book (reference below) being paid more fairly was listed in the top three reasons for leaving an employer.

My first thought is... "how do they know they weren't paid fairly?"  and ... "what is fair?"  In order for people to hold these points of view they would have to know how much others in the company were being paid (fairness is a relative measure - not an absolute) or others in similar jobs at similar companies.  I know I don't have that information on my position.  How do these people judge "fair?"  And as a leader in a company - how do you compete with "fair?"  Doesn't fair change relative to the yardstick?

I have talked to many people over the years about what would motivate them to do something different or stay with a company.  When given the option of increased pay it is always at the top of the list.  You can save a client a lot of money on surveys if you simply concede that if asked - employees will say they want more money.  No point in doing the survey.  It's just true.

Clients typically will then use that as justification for not running a non-cash program and just increase commissions. However, I believe this creates a mercenary environment.  If you continue to increase pay simply because the employees say that's what will motivate them - they will quickly learn to keep asking for pay increases.  In addition, you have now trained your employee base that money is the reason for being with the company.  They are now "trained" to look for more money and have equated loyalty to your company with the amount they get paid. 

My point with this post is that people do things for reasons other than what they say they do them for.  (Great sentence structure.)  Keep that in mind.

Your compensation and rewards systems are designed to support the employee AND the company.  It's a two-way street.  Don't design something one-sided and think it will solve your problems.