Why Isn't This Incentive Program Working?

Incentive programs continue to be one of the most debated topics in management. Sometimes incentive programs work well. Sometimes they do not. Leadership can make a difference.

Have you ever experienced any of these scenarios?

  • You’ve implemented a new incentive program and results go down?
  • You roll-out a new contest and no one seems to care?
  • You announce a lucrative SPIFF program with substantial financial upside, and very few participate?

The Incentive Debate

Incentive programs can do wonders for driving short-term results. In my post on Confidence Bursts, I talked about how small rewards can create focus and an extra push to try new behaviors.

And yet, most leaders also understand the age-old challenge reinforced by Dan Pink in his TED talk: The Puzzle of Motivation (that received 4.6M views).

Contingent motivators often don’t work or can actually do harm, particularly for creative tasks.

In his book, Management Rewired: Why Feedback Doesn’t Work and Other Surprising Lesson’s From Brain Science, Charles Jacobs explains that when we do work that is inherently interesting our brain releases dopamine, giving us a drug-like high. Our brain needs engagement to get the happy chemicals. Money without engagement doesn’t have the same result.

What has been most interesting to me over the years is watching several work groups implement the exact incentive program to employees doing identical work with dramatically different results.  It’s not a matter of the incentive program being inherently flawed, but the context in which it is implemented.

Incentives are part of a larger change cocktail.

So, What’s a Leader To Do?

For many of you the question may not be, “Should we create an incentive program?,” but rather “How much of my leadership energy should I put behind this program I have available?” The opportunity is there to use incentives as a tool as part of your leadership. Is it worth it?

  • You see the benefit to your company.
  • You understand the potential impact on results.
  • You realize the financial opportunity for your team.
  • And yet, will it work?

In my experience incentives works best when the leader…

  • creates a clear link to the team’s vision and goals
  • helps the employees learn the necessary skills to succeed
  • talks about it constantly
  • gets silly with it
  • makes the program easy to understand
  • turns the program into a game or contest
  • helps team members visualize the math
  • creates friendly competition
  • tracks results in a visible way
  • ???

These programs almost always fail when the leader…

  • doesn’t believe it will work
  • “rolls it out” as a separate program
  • doesn’t teach the necessary skills
  • has too many other contests or incentives going on
  • finds it too complicated or too hard to administer
  • ???
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Posted in Energy & Engagement, Results & Execution and tagged , , , , , .

Karin Hurt

Karin Hurt, is CEO of Let’s Grow Leaders and a former Verizon Wireless executive. Karin was named on Inc.’s list of 100 Great Leadership Speakers for Your Next Conference, the American Management Association List of 50 Leaders to Watch, and as a Trust Across America Top Thought Leader in Trust. She’s the award-winning author of two books, Winning Well: A Manager’s Guide to Getting Results— Without Losing Your Soul, and Overcoming an Imperfect Boss. She’s regularly featured in business publications including Fast Company, Entrepreneur, and Inc.

8 Comments

  1. Good morning Karin!

    I’m a big fan of that Dan Pink video you linked to! I’ve shared that with many team leaders.

    I believe that certain personality types are not very interested in competitive situations, contests, etc. So, that has to play a role in the success of any program.

    With that being said, that same person may respond very well to public praise. So, if you keep that in mind, you can still find some great results.

    One thing that I’ve noticed is that many companies don’t have a budget for incentives or rewards; especially if a leader is on a lower tier. That means, if they want to do something like this, they would have to come up with it out of their own pocket or do something that doesn’t cost much at all.

    I’d love to hear your thoughts on this topic in a separate post, if you haven’t already written about it…

    Thanks for sharing this!!!

  2. Bob, thanks so much for your great insights. I agree with you that some are just not that interested in competitive situations, I have seen that play out quite a bit. Also, you are right, my post assumes there is a program to be had… and in many cases there is not. I love that idea for a posts… and I do have suggestions.. stay tuned 😉

  3. Karin,

    Have you read the book The Five Languages of Appreciation in the Workplace? We have totally revamped our entire “incentive” program based on what we learned in this book.

    I’d like to highlight your point that programs often fail when leaders don’t equip their team with the skills to succeed. I’ve talked with many young leaders who forget this part.

    Thanks for another great post.

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