Your typical incentive program is all about setting a goal, achieving it and being rewarded. It’s different from recognition in that you know ahead of time what the goal is and what the reward will be. There is no (or shouldn’t be) any confusion on what needs to be done and what will happen when it is completed. Obviously, there are variations on this typical structure but incentives are pretty straightforward.
The Problem With Most Incentive Structures
Over the course of my career, I’ve designed a lot of programs. In most cases the client will establish the objectives – ie: 10% growth over last year (units/$) or award an increment of some sort above a base. In other words, the client sets the goal and the incentive company designs a program that rewards people for hitting that goal. When I was selling merchandise and travel – that was fine. I had my program pretty much done. Now that I sell advice on the best way to run a program I have a different perspective. I won’t let a client blindly set a goal based on what they think the VCs want or what the stockholders expect. I won’t because it’s bad design and it will result in less than optimal results.
Setting Goals Is Personal – Not Corporate
Pulling form a study highlighted on the PsyBlog site – they ran an experiment (granted the number of people in the experiment is small but it does provide some directional information) where they tested the best way to get people to commit to goals and then actually set plans in place to achieve those goals.
What they found was that goals were more often achieve when... wait for it... People thought they had a chance of achieving the goal and had also thought about the ways in which they may not achieve the goal.
In other words – they gained greater commitment to a goal when they asked folks how they might NOT achieve it.
Here’s an overview of the experiment and some of their findings:
The researchers divided 136 participants into three groups and gave them each a different way of thinking about how they wanted to solve a problem, in this case it was an interpersonal one.
- Indulge: imagine a positive vision of the problem solved.
- Dwell: think about the negative aspects of the current situation.
- Contrast: first imagine a positive vision of the problem solved then think about the negative aspects of reality. With both in mind, participants were asked to carry out a 'reality check', comparing their fantasy with reality.
Crucially, participants were also asked about their expectations of success in reaching their goal.
The researchers found that the contrast technique was the most effective in encouraging people to make plans of action and in taking responsibility but only when expectations of success were high. When expectations of solving their interpersonal problem were low, those in the mental contrast condition made fewer plans and took less responsibility.
What this says to me...
Like a lot of these academic studies – bringing them to the business environment is tricky (and many times counterproductive) but there is some logic here that may be helpful in setting goals and getting folks to commit to those goals.
Here are some ways I’d use this information to develop incentive program goals...
- Before cementing goals in a program ask your team if they think they are achievable.
- If they say no – work to find a common number that you and your team feel is achievable. If the answer is No... the next few steps make no sense (based on the research mind you) since you need an achievable goal to start with (is that a "duh" statement?)
- Ask the team to think about what they might do to attain the goals.
- Then... ask them to think about all the ways they may NOT achieve the goal. Ask them again – is the goal attainable. If the answer is yes – that’s your goal.
- If the answer is no – work your way backward to find out what changed their minds and what can be done differently.
The key point is that through this exercise the goals migrate from “corporate” goals to “personal” goals. And personal goals are harder to ignore and blow off.
I know this is more work than is typically done for incentive goal setting. But really – what good is taking less time to set a goal that isn’t achieved when spending more time at the onset increases your chances of achieving the goal. I don’t know about you but I’d rather spend a few hours planning the goal than a few weeks explaining why I didn’t hit it.
I’ve said this a hundred times – incentives are decision architectures – nothing more. Incentives give people a reason to make a decision – and as the PsyBlog post says...
When done right, the strength of this technique is it forces us to decide. People have a natural tendency to avoid decisions, preferring to stay in a fantasy land where the chance of failure is zero.
How often do people accept a goal but never decide to achieve it? That is the essence of this exercise.
Get them to decide to achieve your goals – and more importantly – theirs.
Paul, thanks for this article. Have read/studied much on effective goal pursuit, all that aligns (pun intended) with your post. Key: a goal isn't really a goal until we internalize it and create clear intention (plans) to act upon it. There are studies which identify approach and avoidance-oriented strategies in pursuing goals which seem relevant to the experiment: people were asked to focus on the positive outcomes (approach), but also asked to consider the hurdles they might encounter in trying to accomplish them (avoidance). Turns out we are most sucessful when employing both strategies. Finally, if we can connect the business goals and associated rewards for attaining them to our more personal, human, intrinsic drives and goals- the greater the attention to and effort that we will place on attaining them. Good stuff.
Posted by: Michpoko | March 21, 2011 at 05:00 PM