I have long held to the belief that employees will accomplish the work they perceive they are being compensated for. As an example, if you were to pay commission to you sales people only to bring in sales– that is what they will do. They will do whatever it takes to bring in the sales, whether it helps the company or not, whether the sale is profitable or not. You are paying them for sales, not profitable sales. This may be an extreme point but I make it to help you think differently about rewards.
Daniel Pink, in his book entitled Drive, unpacks two research studies from 1940 and 1969 that seem to turn on its head the long held belief that rewarding performance leads to higher levels of performance. The study, in 1940 used monkeys and 1969 used humans; I will let you draw your own conclusion from that. But the results, interestingly, were the same. When test subjects were given a task to perform they were motivated to do so with no reward other than the accomplishment of the task. When rewards were introduced for either faster performance or a higher level of performance, or food in the case of the moneys, then performance actually went down. It appears that even the monkeys were motivated by the accomplishment of the task alone.
As a business owner, what can you take away from this study? I refer back to the first paragraph where I drew attention to the notion that people perform what they perceive they are being compensated for. In my opinion the concept of bringing in any sale versus a “good” sale, is actually an interpretation of the studies previously mentioned. To state this concept another way, it is important for a business owner to provide a fair base compensation for the job being performed. Then it is up to the business owner to create a work environment that encourages growth and participation in the core of the business, to provide the motivation to do the work.
To further unpack this concept that people are not always motivated to perform work for higher pay I w draw your attention to a number of free, very cutting edge products that were developed with no compensation to the participants nor are charges made to the end users. These include Linux, computer operating systems that competes with Microsoft; Wikipedia, a free encyclopedia that put Encarta, a Microsoft product, out of business; Apache, a free open source web Server.
Companies like 3M, allow their employees to use up to 20% of their time doing whatever project they want, whether it is part of their job or not. 3M, in turn, lives off the new products created by this totally unmanaged process. Your business is not 3M but if you could turn your employee time into productive time, what would that do to your business? To give you a practical example, when I worked for a real estate company a number of years ago, I saw the need to provide a sales tool to our leasing agents to help them better analyze the profitability of a deal. The market place solutions to this issue were good, but expensive. So I took it upon myself to develop a product that they could use to better their analysis. I had little time in my day to do this so I did it all on my own time. I was not compensated for it, nor was I told to accomplish it. I did it all on my own. To this day, many years later, I still take pride in accomplishing this and likewise to this day very few people understand what I did and how it helped the company, but our environment encouraged growth and improvement so I was just willing to put in the effort.
How can you rethink how you motivate your employees? How can you create an environment that encourages growth and development? If you would like some help figuring this out, as a partner with B2B CFO®, I am ready and willing to help you accomplish your goals.