Today I'm channeling the smartness of my friend and fellow blogger Paul Hebert of Incentive Intelligence. A recent post of his centered on a positively brilliant statement that anybody in the business of designing incentives (and who actually knows their stuff) should enthusiastically embrace:
Incentives Are Your Worst First Solution
That's right (and yes, I did tip my hand with the title). It is always a mistake to respond to a performance issue by first developing and implementing an incentive plan. Why? Because the root of the performance issue is rarely, if ever, the absence of an incentive plan. Ignoring the causes and contributions to the issue in favor of simply tossing a carrot into the mix rarely, if ever, solves the problem in a meaningful and sustainable way. And more often than not, creates its own set of secondary problems (otherwise known as the unintended consequences).
What, then, should be your first response? To get a better handle on the situation, including the current obstacles to the change you wish to see, as well as any "bright spots" where it may be already starting to happen. And I found some good ideas and practical tips in a book I just finished, also based on a recommendation by Paul, Switch by Chip and Dan Heath.
I agree with Paul that this is probably not the be-all-and-end-all of books on change and also that its authors do fall victim to the problem in so many popular business books today of presenting evidence to support their point without always acknowledging that which contradicts it. All that said, I find it a wonderful resource for compensation professionals in that it helps us - in a very compelling, readable and story-driven way - appreciate and understand the factors involved in successful, transformational change.
And yes, I do still think incentives have a place here - and the Heath brothers themselves acknowledge the important role of rewards. After, in the words of the authors, the destination and the roadmap there have been clarified, people have felt the need for the change, and the path has been appropriately shaped, we should be reinforcing success along the way and ultimately sharing the value of the victory that our collective efforts have created.
Rewards play an important role in helping and supporting the well-scripted change effort; they cannot be the change effort on their own.
For more, check out Paul's video with the "money quotes" from Switch...