Incentive Intelligence

The Best Study So Far on Cash VS Non-Cash Reward

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I’ve railed against some of the non-cash vs. cash discussions, stating they are red herrings designed to get you to buy one award over another in lieu of sound compensation and reward strategy.  You know I believe that cash is one of the arrows within an employer’s quiver for driving behavior.  You know I believe there is a place for cash.  I like cash.  I need cash (phone number and contact info at top of page btw...)

However, it is not always the right thing to do.  Conversely – non-cash isn’t always the right thing to do either.  You know I believe there are transactional and social relationships inherent in all working relationships and the proper use of cash and non-cash keeps those relationships in their place and keeps you from – as all good Ghostbusters know – crossing the streams.

And you know how I feel about “academic” studies that show a result that is then shoehorned into the real world of getting work done.  Most of the time they can’t/won’t translate.

Now they just might...

Well – I ran into a study that does pretty much what I would have done had they asked me to run the study.  They used a real-world situation, they tested cash, non-cash and non-cash with a “value” assigned to the award.  They looked at both the behavior of the subjects in the experiment as well as their opinions via a survey (action versus intent.)  The only thing they didn’t do was put it in an “incentive” context.  It was more of a “recognition” context (all you Dan Pink fanboys get ready – right up your alley!)  In their terms “a surprise gift.”

But let me give you the background and results and then you can go read the mind-numbing statistics yourself.

It started with this article on Slate titled: “Raises Don't Make Employees Work Harder - But pay cuts make them slack off.”  The article references a study conducted to see if pay increases actually impact performance – and if pay cuts hurt performance.  The study really ended up boiling down to “Is it better to cut pay or cut people to save costs.”  The net-net is that pay increases only positvely affected performance for a very short period, but pay cuts hurt overall performance.  They arrived at the conclusion that in order to maintain current levels of productivity it might be better to lay off workers than cut pay across the board to get the same savings.  

My concern with their conclusions is that the study explicitly stated that the cuts were completely without explanation.  In other words – they didn’t tell the employees why they cuts to pay were being made.  That is a huge flaw in the study and one I’d keep in the back of your mind as you read the results.  Context is everything.  I’d take that study with a grain of salt...

but...

That’s not the good part...

The good part is they reference a study conducted in February 2010 (one of the most recent I’ve found) that talked about performance and the use of cash and non-cash in a real-life situation called “The Currency of Reciprocity - Gift-Exchange in the Workplace”.  

Clouds parting, chorus singing – Nirvana.  Here’s the link to the study for free download.

You gotta love the lead-in abstract to the paper:

"What determines reciprocity in employment relations?  We conducted a controlled field experiment and tested the extent to which cash and non-monetary gifts affect workers' productivity.  Our main finding is that the nature of the gift, not its monetary value, determines the prevalence of reciprocal reactions.  A gift in-kind results in a significant and substantial increase in workers' productivity.  An equivalent cash gift, on the other hand, is largely ineffective even though an additional experiment showed that workers would strongly favor the gift's cash equivalent." (emphasis mine.)

Read that again... cash was less effective even though workers preferred it.  Is it Groundhog Day on the this blog?  

Their premise:

"We hypothesize that, unlike a wage increase, non-monetary gifts or gifts in-kind provide a more salient signal of kind intentions and therefore represent a superior mechanism for the establishment of successful gift-exchange relations. In comparison with money, gifts in-kind are often considered to be more thoughtful and to more credibly reflect regard."

Meaning – non-cash communicates emotions and social contracts – not transactional ones.  And that is double-plus good.

The Experiment...

In a nutshell they measured performance under three set ups... cash increase, gift of a thermos (wrapped as if it were a gift – that’s important) and a gift of the same thermos while communicating its monetary value (that’s for all you trophy-value folks...)

Highlighting some important quotes from the study:

"The results show that the nature of gifts crucially determines the prevalence and strength of reciprocal behavior. An increase in fixed wages has no significant impact on workers' productivity. However, a gift in-kind of equivalent monetary value has an economically and statistically significant effect on productivity. Workers provide 30 percent more output on average. Moreover, this effect remains large and significant over the course of the entire working period. In contrast to all existing labor market field experiments, the elasticity of output towards the change in fixed compensation is remarkably high with 1.54, emphasizing that productivity gains exceed the relative increase in labor costs. We replicate the results with our additional control treatment where we explicitly communicated the exact monetary value of the gift. Treatment differences thus cannot be explained by systematic overestimation of the monetary value of the gift." (emphasis mine.)

So all you gift card haters read that again – when the value of the gift was communicated it had no statistical difference in affect.  For those of you on the “trophy value” side of the equation – booya!  A gift card (a gift with a monetary value) is as effective (in this study) as a gift with no communicated value.  

Aaaannnnddddd.....

"In addition, our results suggest that a higher share of perks in the compensation mix can be profitable for the firm because workers are more likely to reciprocate positively to the receipt of perks."

Plus... as I’ve said a million times – what we get on the survey’s isn’t what we see in behavior....

"Despite this strong preference for cash, the gift in-kind has a substantially stronger effect on workers' productivity than the cash gift. This suggests that the monetary value of the gift is of lesser importance than its signaling character."

It’s About Context

To me this signals a huge leap forward in the analysis of incentives and rewards in the workplace.  It shows me that there is proof that workers will say one thing and actually behave differently.  

It says that compensation establishes the transactional baseline for a job and that awards create a more social and emotional connection which drives behavior.  

It also tells me that the process – how you give the award – is critical in how the employee assigns value.  If you just dump it in with their pay – you stay on the transactional side of the equation and get nothing for the effort.  If you separate it out and provide a “moment” where you recognize and reward – with something other than “pay” – you get a much different – and much more effective result.

Granted they do cover their butts at the end of the study (but what study doesn’t?) when they say...

"While our results show that a non-monetary gift is more likely to increase workers' productivity, it would be premature, however, to conclude that higher wages are generally not able to trigger reciprocity. Given that higher wages are communicated in a relatively neutral manner in our experiment - as well as in Gneezy and List (2006) and Kube et al. (2010) – future studies examining whether there is potential scope for increasing perceived kindness by choosing a more affective framing might be worthwhile.  Such framing could render the gift-character of the wage increase salient."

So there will be a sequel (we hope...)

 

Related articles

• Does Money Really Motivate? (mdeepm.wordpress.com)
• Why Non-Monetary Rewards Are Important (brighthub.com)
• Why Gift Cards Are Tops In Non-Cash Awards (awardofchoice.com)

Loser Perks Drive Performance – Or do they?

Winners are treated differently (just ask Charlie Sheen.)  

You know what I’m talking about.  Top performers get to come in later, leave earlier, get better lunches and generally live a charmed life.  Right?  It’s all that tiger blood and alien DNA.  That’s the impression some folks have.  It might just be they work harder and do a better job.  But we can’t have that.  It has to be something else.

And it is (according to research.)

Perks For Losers

HRMorning.com had a post up last week called:  “Should ‘losers’ get perks, too?” which recapped research from Pittsburgh’s Carnegie Mellon University.  In that research – and I’m quoting from the article HRMorning referenced:

“She found that top performers and longtime employees who had clearly paid their dues often received special privileges from their bosses, whether it was the ability to come in a little late or to specialize in the more complex issues of the job. Both management and co-workers recognized those perks as warranted.

But Rousseau also found something she didn’t expect: The less valuable employees managed to work out deals with their employers, too; most of the perks employees want have no real value to anyone but the affected party; and the folks “with the scuzzy reputations,” though they have fewer so-called “i-deals,” when they got deals, they became valuable contributors, she said.”

Taken at face value, the research (and the comments from the researcher,) seems to indicate that providing rewards increases performance, even if they are unwarranted.  

I call B.S. on this...

It’s About Paying Attention

I’m going to go out on limb and say – the rewards had nothing to do with performance.  

I know, I didn’t do the research and wasn’t there – but I’ve been around employees long enough, and done my own research to know that the conclusions in this research are plain wrong.

Here’s why it “seems” rewards are increasing performance.

1. Providing “i-deals” – as they are referred to in the research – means the manager actually had to sit down and talk to the employee about what they valued and what they wanted.  In other words, they had a conversation, were interested in the output from the employee and considered their needs and desires in the process of defining work tasks.  The prime mover of performance isn’t the reward – it’s the conversation, the interest, the validation that what the employee does actually has impact on the company.  Here’s the real test.  Take the same amount of time spent figuring out the “i-deal” and spend it talking about the job, the impact, the way the employee does it, the roadblocks and the successes.  In other words – talk about anything one-on-one with poorer performers and don’t offer any “i-deals.”  I’m 100% certain you will get increased performance.
    
   Just showing you care enough to spend the time with them increases their connection to the job and you as the manager.  Don’t fall on awards so quickly.
2. Providing “i-deals” creates an influence obligation – it’s called reciprocity (one of Cialdini’s 6 principles of influence.)  It’s not the “i-deal” itself driving the performance – it’s the fact that you gave something to the employee without getting something first.  There’s now an imbalance (psychologically speaking) that weighs on the employee – subtlety working their psyche so they need to perform better, work harder, do more, in order to balance the equation. 
    
   You could accomplish the same impact without the “i-deal” they referenced if, on a somewhat random basis, you just told the employee – “You look like you’ve had a tough day.  Take the next few hours off – go home, rest and play with the kids.”
    
   Do that a few times (no “i-deal” involved – totally unilateral) you’ll see performance improve.

Rewards Aren’t the Issue

In most organizations it isn’t the rewards that drive the performance – it’s the relationship people have with their management and their fellow employees.  Don’t get me wrong – rewards help shape behaviors – but they are not a panacea.

The research conclusions in this research are flawed (IMHO) and before you go throwing “i-deals” around like so much confetti... try what I outlined first.  You’ll get the same result without setting a precedent – and believe me... you start down the “perks” path – you will regret it someday.

Step away from the rewards catalog and no one gets hurt!

“i-deals”?  Is that the ipad3?

Just ‘cuz it’s funny – I’m including a video I saw when reading a post from Laurie Ruettimann – The Cynical Girl.  I couldn’t help but think of it when I read about “i-deals.”  

Maybe your “i-deal” is a new ipad?  

(Subscribers will need to click through to the post to see the video below)

 

 

 

Related articles

• Ethics Isn't an Incentive Objective (i2i-align.com)

Do Incentives and Rewards Need an Intervention?

We haven't been in the habit of linking from this site to the stuff we do for Fistful of Talent but our post today on FOT is pretty interesting (if we say so ourselves... and we do...)

The question is:  

If awards stimulate the same area of the brain that cocaine, heroin and nicotine do, are we creating award addicts?

Ready, set, go... Discuss.

Check the post - link here.

Big Hairy Audacious Goals – And How they Hurt Your Incentive Program Design

BHAG – many of you may remember that terminology.  It was originally defined by Jim Collins and Jerry Porras in a 1996 article “Building Your Company’s Vision” and was highlighted in their book “Built to Last.”  Collins and Porras defined a BHAG as... 

“a form of vision statement ...an audacious 10-to-30-year goal to progress towards an envisioned future."

I worked at a company where we had an “all hands” meeting and the leadership, obviously smitten by the book, announced our “BHAG” and then spent a day talking about why we needed it and what we would all reap from achieving it.

It went nowhere.  Don’t get me wrong.  It was a good BHAG (as BHAGs go.)  

It was specific.  It was BIG.  It was visionary.  It was a failure.

At the time I thought the reason the company didn’t achieve the BHAG was a fault of our leadership, our company politics, and even to a degree my ability.  What I didn’t know is that the BHAG our leaders laid out in front of us had little chance of success from the get-go because it wasn't based on any previous experience.  

It was, for all intents and purposes – a fantasy.  A wonderful, great, big, fun, fantasy. 

Some folks will tell you that you need to “envision the future” and have a “law of attraction mindset” – but what they don’t tell you is that any future scenario you envision that doesn’t have some connection to past success is a fantasy.

At least that’s what I gleaned from this article on Psyblog - "Success! Why Expectations Beat Fantasies.”

 

Setting Goals Based in Reality

The article discusses 2002 research on the difference between fantasizing about future outcomes and expecting future outcomes.  Pulling from the article:

"They measured how much they fantasized about a positive outcome and how much they expected a positive outcome.

The difference might sound relatively trivial, but it's not. Expectations are based on past experiences. You expect to do well in an exam because you've done well in previous exams, you expect to meet another partner because you managed to meet your last partner, and so on.

Fantasies, though, involve imagining something you hope will happen in the future, but experiencing it right now. This turns out to be problematic."

What I read into that is any incentive and reward program that has a goal based on what you “hope” will happen is less effective overall than a program with a goal that has some historical validity.  In other words – it might be nice to say you want your sales team to do 50% more than last quarter (a somewhat BHAG no?) and you may even provide a reward associated with it.  However, if your company or your sales team has never seen a 50% increase or seen anyone even come close to a 50% increase – it might be more of a fantasy than an expectation.

 

Setting goals based on history is a better way.  

To their credit, Collins and Parros did outline the need to connect a BHAG to your company's core values and core competencies.  But I've seen a number of incentive programs where the goals are just plain fantasies.  The thinking is that if we put it out there the team will rally around the sheer audaciousness of it.  But that is a plan for failure.

Instead, find what has been accomplished before.  What were some big successes?  Add a little to that.  Use that as your benchmark.  Setting appropriate goals in your incentive program will change the mindset and the discussion from envisioning a fantasy – to figuring out how to achieve the goal based on previous successes.

Don’t go BHAG – go MSAG - Medium Scruffy Aggressive Goal – you’ll have a much better shot at achieving it!

 

Related articles

• Smoking and Incentive Program Design (i2i-align.com)
• The 2 Biggest Mistakes in Sales Incentive Programs (i2i-align.com)
• Success! Why Expectations Beat Fantasies (spring.org.uk)
• goals gone wild: the paradox of stretch goals (orgtheory.wordpress.com)

Prep Work - Motivation #HRHappyHour - Tonight Jan 13 at 8:00 PM

Okay - I'm putting this up in a hurry 'cuz I got a lot going on today and I want to be sure you all are prepared for tonight's #HRHappyHour with me and @TrishMcFarlane.

Three posts and three points of view that will give you some idea of the topics and opinions you might hear tonight.  Don't say you weren't warned.

Remember - to listen via your computer speakers just go here.

Or call in and listen at (646) 378-1086 - If you want to talk live just press "1" on your phone and you'll go into the queue.

Really looking forward to getting your feedback, questions and opinions.

Post #1 - The Incentive Manifesto

This was my feeble attempt to codify the things I see every day that go wrong with incentives and reward programs.  Because I'm not as prolific as Martin Luther or the ClueTrain guys there's only 9.5 not 95 theses.

Post #2 - Because There Was a Box

I included this one because too often we look to incentives and rewards to drive behavior change and really what we need to look at is the big picture - the environment within which the behavior occurs.  Start there and move out to incentives.  Many of your motivation problems are really environment problems.

Post #3 -  AwardmyopiaItswhatwesellitis

Yeah... that's what it says.  Go to to the post and see the #1 thing that goes wrong with incentive and reward programs.  THE # 1 Thing!

Hope to hear you all tonight.  

Let's lite this candle!

 

 

Related articles

• Incentives Shouldn't Be Your Default Setting (i2i-align.com)
• Smoking and Incentive Program Design (i2i-align.com)
• This Thursday Night All Your Motivation Belong To Us (i2i-align.com)
• Creating A Balanced Employee Influence Program (i2i-align.com)

Increase Incentive Program Results by Putting a Face to It?

In all the years I’ve run incentive and reward programs, reviewed them for clients or just heard about them from friends and family I’ve never seen a program that was “owned” by an individual.  Almost every incentive program is run by the “company” or the “department.”

Other than an introductory letter from the titular head of the group whose budget is funding the program it is pretty much an “organizational” program.  No real person is associated with it.  

When programs are announced there are usually flashy emails or print “announcements” highlighting the rules, the awards, the fine print, but no real connection to a person.  

The only real exception to this is the “President’s Club” type program run by the organization for the top recognition honor in a company.  But other than the initial appeal or announcement by the real President – all communications comes from the “program.”

I’m thinking that your incentive program could be much more effective if you put a name and a face to the program.  

 

If a Face Increases Donations Could a Face Increase Performance?

Wikipedia is looking for money.  The free, crowd-sourced encyclopedia and the defacto standard source for all college term papers and blogs is on its annual funding drive - looking for money to keep the service going.  They really don’t want to go with advertising in order to avoid the problem (real or imaginary) of people thinking the site could be corrupted by advertisers putting pressure on the type, tone and content.  They are doing it in Public Television fashion – they’re asking for donations.

I saw a tweet or feed the other day asking if the banner ads at the top of Wikipedia entries with Jimmy Wales’ picture and a personal appeal were effective.  A quick bit of research (via Wikipedia of course) and the surprising (or not surprising) result is… immensely so.

In fact the banner ads with Jimmy Wales’ mug are by far more effective than any other banner format.  The results on their banner testing efforts are here but for those that want the quick answer - overall they state that the “Jimmy” appeals have a 3% click-through rate and a much higher donation level.  

I just checked the results of the October 26 test and the “Jimmy” appeal was almost 16 times more productive than the next highest donation total ($50K to $3K.) Because of those results Wikipedia may allow individual editors to create their own personal appeal banners in hopes that their face will also help with the money flow.  

The bottom line is this – adding a person (whether it is just Jimmy or if the other editors faces will have the same effect is yet to be seen) increases the amount of the behavior Wikipedia wants – clicks and donations.

 

Would this work for you and why would it?

It is rare that we ever do A/B testing with incentive programs – something that should be done somewhere, somehow – so we probably will never see a head-to-head comparison of different theories of performance incentives to really know what works better or worse.  But I think that including a person as an “owner” of any incentive program will increase the results of the program.

My logic runs this way…

Programs that have an “owner” add a social layer to the program.  Any program that is sponsored by a department or group or the company stays in the realm of “transactional.”  Participants who don’t perform aren't hurting “anyone” – just the “company.”  However, adding a person as an owner changes the relationship from the impersonal to the personal.  Now there is a real person who the participant is either helping, or, letting down.  This would be especially effective if the “owner” was well-known, popular, and an authority.  I’d also amp up the request a bit and have them ask for specific commitments and goals.  

By adding an owner – a face – to the program means the participant is now working to help achieve someone else’s and their own goals.  

They aren't working for “the man” as much as they are working for “that man” or “that woman” as the case may be.  

Adding a person to the mix allows you to take advantage of social psychology – and leverage those influence techniques.  I’ve not seen any research on it but I’d hazard a guess that the same social psychology levers that are so effective when used by individuals are not as productive when they are wielded by “companies” or “departments.”

Social psychology works because it is, well, social.

Influencing behavior has always been about more than the rewards.  Influencing behavior in a way that engages and drives a connection with participants needs to include something other than the points, credits, dollar signs. 

It needs a face.  

It needs to connect personally – not just financially.  

Thoughts, ideas?  Hit me in the comments.  Love to hear your point of view on this.
 

Related articles

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This Is Your Brain on Incentives

Bumped up against this site while reviewing my starred items in my google reader.  The post links to another site that lists out 6 ways to stimulate the brain.  As I read through the list I thought it would be interesting to link the way the brain works and incentive program design.  

On with the lesson…

The Brain is Self-Centered

The Brain is a very self-centered entity and general considerations about others do not reach it. Think of it as the center of ME. Do not assume that it has any patience or empathy for anything that does not immediately concern its survival and well-being.

Incentive programs should focus on the benefits the participant will receive – not the benefits the company or sponsor will reap.  Don’t talk about “company goals” – talk about individual rewards.  Link what they will do and the how that impacts them.  Individualize it as much as possible.  Is there a “reward calculator” that lets participants calculate their level of earnings?

The Brain Seeks Contrast

Before/after, with/without, slow/fast all allow the Brain to decide. Contrast is a safe decision engine. It allows quick and safe decisions. Without contrast, it enters a state of confusion, which ultimately results in delaying decision.

Incentives programs should show a difference between not playing and playing.   Show them the difference between being an average performer and a great performer.  When setting up the earnings structure make sure it is crystal clear the difference between levels of performance and link it to what THEY will earn (see #1.)

The Brain is Tangible

Numbers work for the neo-cortex, but the Brain won’t decide based on numbers alone! It is constantly scanning for what is familiar and friendly, what can be recognized quickly, what is tangible and immutable. It cannot process concepts like “flexible solution”, “integrated approach”, or “scalable architecture” without efforts and doubts.

Create a picture of what the awards in the program will do for the participant.  Don’t talk about a 42” TV – talk about watching the SuperBowl with friends.  Don’t talk about earning new appliances – talk about the time savings the new dishwasher will bring.  Paint the picture of the participant using the reward.  See if you can pull #1 and #2 into the discussion to really amp up the influence.

The Brain Remembers Beginning and End

It forgets most everything in the middle. This short attention span has huge implications on how to construct and deliver powerful messages. Placing the most important content at the beginning is a must, and repeating it at the end an imperative. Keep in mind that anything you say in the middle of your delivery will be mostly overlooked.

Create specific periods of performance with specific beginnings and endings.  Include a “fast start” bonus and a “fast finish” bonus when possible.  Segment annual programs into  smaller programs to generate more “beginnings” and “endings.”

The Brain is Visual

Neuroscience demonstrates that when you see something that looks like a snake, you react even before the conscious mind physically recognizes it’s a snake. This implies that visual processing enters the Brain first which can lead to very fast and effective connection to the true decision-maker.

When we talk about painting pictures – why not show a video of the award earner receiving the award – using the award – bragging about the award.  Why do we remember great TV commercials but so few great copy-heavy ads?  Here’s your answer.  We like pictures… “See Spot run.  See spot earn award.  See spot use award.”  Big pictures on every page.  Can you see it?

The Brain Responds to Emotion

Neuroscience has clearly demonstrated that ‘emotional cocktails’- create chemical reactions that directly impact the way we memorize and act.

Your incentive communications should be stories – not statistics.  When reporting performance data in your program connect it to a specific performance story from someone in the program – preferably someone who is well-known within the participant base.  Learning how “Joe” or “Jane” hit their number has more impact than a chart or graph showing average sales figures by region.  Tell the story.

 

 

There you have it – the Pick 6 for your incentive and reward program.  

Check your current program.  Are these elements included?  Why not?

 

Four Dead In Ohio… Social Proof and What You DON'T Say Has Impact

While many of us will read that headline and dredge up the line from the song Ohio by CSN&Y – I bring it up in reference to four teen suicides in Mentor, Ohio.  All four were students at the same school and all four deaths were linked to bullying.  (Background here - AP story on Yahoo.)  We're not talking about the bullying you and I probably experienced - read the article - it was bad.

I bring it up not to make light of it but to highlight how the forces at work here can have big impact and big results.  The issues I saw as I read the article were two-fold…

1. It is a statistical quirk that suicides run in clusters.  Dr. Cialdini attributed it to the fact that when suicide is reported it triggers a form of social proof – “If they did it – I can do it.  Other people feel like I do and they did this.”
2. For the most part – only the victims of the bullying and those that committed suicide were named in the article.  No mention of those that may have been contributors to the bullying.

I am not saying bullying caused the suicides (a good discussion on this is here.)

I am saying that there are two things that we should keep in mind when it comes to how our organizations view behavior and how your organization may react to those behaviors.

 

Too Much Focus on What Goes Wrong

If your ongoing communication focuses on the things people are doing wrong it will seem that there are more people doing the wrong things than doing the right things.  Even a small amount of press focused on ongoing problems gives the impression that there is more bad than good.  

Like suicides – bad news can begat bad news.  Be careful how “transparent” you are and how much you air your dirty laundry.  It is important to address deficiencies but it isn’t required that every issue be heralded and put in lights.  Handle it like you’d handle a family problem – with the appropriate people and the appropriate discretion.

 

Not Enough Focus on the Bad Behavior

Don’t hide those that really cause truly bad problems and don’t hide the consequences of unacceptable behavior.  This may seem in direct conflict to the previous statement.  However, the impact to the group in Ohio would have been much different had the press coverage been more about the people and the unacceptable behavior of bullying than about those that took their lives.  

We’ve all seen people leave companies for “new opportunities” with nice severance packages – but knew in our hearts they cheated on expenses reports or harassed employees.

It’s the difference between a story that says:  “These four teens commit suicide due to bullying” and a story that says “These teens, through bullying, contributed to the death of four others.”

Which of those two statements is closer to what we want to really communicate?

 

Personal Rant Now… Nothing about business…

As I read the articles on the suicides I kept saying to myself – “Who did this and why are they not being dragged into the open?”  

I know why – there are many reasons – legal, ethical, etc.  But in this situation, as long as the perpetrators can hide behind that veil – the real issue – the social UNACEPTABILITY of bullying - also stays behind that veil.

I understand that in the case of the students we have a privacy issue for those under 18.  But as long as names are withheld – there is no consequence.  

Here’s a thought – for other issues it has been established that parents are responsible for the actions of dependent children - why not apply that same standard here?  

The parents of the bullies need to be outed.

If you are a parent – do you know if your kid is a bully?  What if you knew your name would be in the paper because your child was a party to bullying?  Would that change your point of view on bullying?  Would that change your reaction from one of “kids will be kids” to addressing the issue with your children?  Have you talked to your children about bullying?  Do you know if your kid is a bully?

Shouldn't we have as much transparency around those that cause the problem as we do about those that feel the effects of it?  

I would hope my children never face the kind of abuse that these four souls endured.  And I would also hope that my children never participate in, or through non-intervention, condone this type of activity.  I will have that conversation – again – because we’ve had it in the past.  I hope you too take the time to have a conversation with your child about bullying as well.

There is no reason for bullying.  There is no reason for anyone in their teens to suffer the indignities these kids suffered.  

This is a tragedy and that tragedy should be named.  Yes, the deaths are tragic.  But the bigger tragedy is that those that are truly responsible are hidden from our view - and hidden from negative opinion and social condemnation.

That is how we create real social proof… That bullying is unacceptable behavior.  

 

All Motivation – All Week – Motivation Show

Starting today I’ll be skulking around Chicago for the next 4 days.  The annual Motivation Show is in town and I’m making the annual pilgrimage to motivation mecca.

According to “inside sources” there should be over 8,000 people (some say as high as 10,000 – some say lower – but who cares – it’s a bunch!) – either as exhibitors or looky-loos.  I’m in the latter category.  

I am not exhibiting.  I am speaking at two different places…

Tuesday - I’m talking social media at the IRF education day summit.  Only one of many speakers – but I’m sure it will be the best (kidding – they are all good.)

Wednesday - I have a solo gig called “Responding to the Assault on Incentives” where I’ll walk through how to talk to clients and your own folks about incentives and their effectiveness and need – even in today’s more “enlightened” business world (think zappos and “if-then” awards coexisting.)

Then – during my free time…

I’m really hoping to do more (some) video this year of the show floor with some interviews and commentary to post either at vimeo or youtube.  I keep saying I’m going to do this but it always turns out to be harder than all the articles on video blogging say it is.  Maybe I’m just video-challenged.

I’ll be tweeting – hopefully during my presos with the help of a PowerPoint plug-in – and during the times I’m wandering the floor.  I’ll for sure be using the “official” hashtag #moti – but I’ll throw in a #good, #bad, #ugly tag now and then as I run across stuff.  Unfortunately for you all – my snark instincts go on high alert at the show so expect me to tweet out some rather snide remarks.  If I don’t it’s ‘cuz I’m either busy or I just didn’t find anything you’d find interesting.

Pay attention on Wednesday afternoon!

I (we) have an announcement – one that smart incentive companies will jump on – and not-so-smart ones will deride.  But I’ve got thick skin and I know when I’m right (even when I’m wrong.)  I think it could change the industry (or is that just hyperbole to get you to watch for my announcement – probably both.)

So – as you read this – I’m “en-route” to Chicago – the city of big shoulders, hog-butcher to the world, and for a few days in October - home of cheesy swag, gift cards, chocolate pillow gifts in the shape of corporate logos and all other manner and madness associated with “motivation.”  Abe Maslow would be proud.

It should be fun… it should be funny… it should be interesting.

See you in Chicago!

Is This An Incentive – Or is it Gambling?

Can Betting Increase Program Success?

 

If you have kids I’m sure you’ve said something like, “If you study hard and get straight A’s I’ll buy you “x.”  Fill in the “x” based on your last W-2.  For some it’s a car – for others, like me growing up, it was a cupful of M&Ms (my brothers and sisters will understand that reference.)  We give our kids all sorts of incentives to do things – whether it’s grades in school or chores around the house.  

But what if you gave the kid a different option?  What if you said – “If you get straight A’s I’ll buy you “x” – but if you don’t, you have to give me your X-Box for a month.”Which of those two options would be more effective?  Before you answer, consider this.

 

Loss Aversion

Psychology tells us that most of us are loss averse.  We respond more to the fear of losing something of value than we do to the pleasure we get from gaining something of equal value.  Almost twice as much.  

Give someone the choice of losing $50 on a coin toss or winning $100 they shy away.  Change the equation to losing $50 or winning $200 – more people will take that bet – even though both scenarios have the same exact chance of losing $50.  Why would the extra $100 “possible” gain change our behavior?  The odds of losing are exactly the same and $100 is a $100.  In other words, we walk away from a 50% chance of winning $100 but we stay and play when the winning number $200.  In both cases the odds of winning and losing are exactly the same.  Logically, the amount of winning shouldn’t be a factor.

Our brains just don’t like losing.

 

Enter Ultrinsic

Long intro to this… Ultrinsic - A web site that invites college students to bet on their grades.

I find this site fascinating.  You set up an account, put money in the account, connect with your college (now over 30 participating colleges), choose your desired grade, the site calculates odds and you choose a bet amount.  Hit your grade – get the total award (your contribution and Ultrinsic’s contribution.)  Fall short and they keep your bet.  You can bet on individual classes, all your classes (kind of a trifecta) and the long-shot bet – your 4 year grade point average.

This will only work if the awards can outstrip your inherent fear of losing your own money.  I know the site uses historical references for setting odds on the individual classes at each participating university but I wonder if they also take into account the premium we need to have on winning to get us to play the game.

 

Can You Enhance Your Incentive Program Using This Concept?

Can we use this thinking in an incentive and reward program?  To a degree.

There are a few programs out there that use a variation on this theme.  These programs give a sales person a choice of goal – small, medium and large.  All three goals are over and above previous levels (or at least they are representative of some sales growth pending market conditions, etc.)  Participants choose their goal, and if they hit it they earn their bonus.  Fall short, but still above the “minimum” they earn a much, much smaller bonus.  Choose the highest bonus and hit it – earn real big.

My understanding is that this structure drives more goal-oriented behavior for a few reasons.  One, the participants have some control over the outcome (or perceived control) by picking their goals.  An old saw in the incentive industry was that participants will set a goal at least 10% higher than a company would.  No proof – just anecdotal.  

Second, they are publicly submitting and committing to the goal.  That plays on the principle of commitment – people like to behavior consistent with past behaviors and commitments.  

And third – it provides some loss aversion in that if I don’t hit my goal I fall back and earn much smaller amount.  While it is still a gain, the brain sees it as losing the big bonus.

That structure has some powerful psychological juice behind it.

 

Would You Ramp It Up?

Here’s the question for the audience.  Would you take it to the next level and ask your employees, sales people, channel partners to put some of their cabbage in the pot?  

Would you ask your participants to set aside a portion of their own money, before start of the program, which the company would later keep if goals weren't hit?

Just wondering what you all think.