Eleven teachers from the Atlanta Public Schools were recently convicted for tampering with state standardized tests. An investigation found that 44 out of 56 schools cheated on the year 2009 tests; 178 teachers and principals were found to have corrected answers entered by students. Many who confessed blamed the pressure to meet mandated targets and the consequences of failing, including termination.
Why did this happen? One can argue that this was inevitable with the “Pay for Performance” or “Carrot and The Stick” approach from management. The traditional mindset for employee motivation is akin to treating a person like a horse – you dangle a carrot in front of it to get what you want and punish it with a stick if it fails to do so. The “carrot and the stick” approaches just don’t work well (if at all).
Large incentives tend to drive the wrong type of behavior. We saw that happen not only in Atlanta but also with the financial scandals where banks and institutions were falsifying mortgage loan applications and leading unqualified customers to affordable loans. The reason? There were large monetary incentives to hit the “numbers” and penalties for failing. People ended up losing their homes and a huge number of banks failed due to bad loans – with the biggest financial names requiring federal intervention to avoid bankruptcy.
The rewards and punishment system inevitably leads people to ignore the bigger picture. They become so focused on the reward(s) and penalties that they (and the organization) develop tunnel vision. You end up doing what gets you rewarded short term, not necessary what is right for the organization in the long run. Suppose that management was incentivized by quarterly bookings and shipment targets. Larger discounts may be used to entice customers to close orders by the end of the quarter and products may be rushed out to meet the shipping targets. The possible downsides are lower margins due to larger discounts, stressed employees, lower quality goods, and more customer satisfaction issues. People stop helping each other because it conflicts with their personal goals and targets (one is penalized for being helpful).
Another surprising result is that people actually perform worse with such reward and punishment systems. You actually demotivate people – the exact opposite result of what the incentives are designed for. Microsoft abandoned the “stack" or "forced ranking” employee-review and compensation system where managers graded and ranked employees against one another on a scale of one to five. The system guaranteed that a percentage of employees would be designated as “under-performers” and were a key factor in promotions and bonuses. Some companies employing such a system penalized such lower ranked employees monetarily or with termination. The end result was low employees morale, complaints about unpredictable rankings, power struggles, the focus on looking good in front of management, and unhealthy competition among colleagues. Employees became inward focused versus customer outward focused. One could see the product and corporate results of such a system during the Steve Ballmer reign at Microsoft.
So what works?
Blanchard International calls the traditional system “Imposed Motivation” where one thinks “I have to do it”.
Optimal motivation is based on “A-R-C” * – which satisfies three basic psychological needs:
· Autonomy – feel that we have choices, freedom within boundaries
· Relatedness – genuine connection with others and contributing to a greater cause
· Competence – personal growth, continual learning, and a sense of accomplishment
Daniel Pink in his bestselling book, Drive: The Surprising Truth About What Motivates Us“, came to the same conclusions. "A-R-C" represents the core human needs and motivators behind the motivation theory known as the "Self-determination Theory (SDT)".
How an Individual Can Gain Optimal Motivation:
1. Ownership. Realize that you do have some control over how things get done (and definitely control over how you feel).
2. Connect with your colleagues and customers. Take the time to chit chat and know them. Get involved in company extracurricular activities, e.g. community outreaches, to bond with others.
3. Take the perspective that every project and task is an opportunity to learn, improve, and grow. Be curious. Accept challenges. Pause to celebrate your accomplishments.
How a Leader Can Drive Optimal Motivation:
1. Trust and empower your people. Don't micromanage. Make them part of the decision process. No more "My way or the highway".
2. Have genuine compassion and empathy. Have shared corporate and team values and goals. Be transparent and inclusive. Learn what your people care about and their personal life and career goals - and help them on their personal journey.
3. Mentor and coach. Give people an opportunity to learn new skills and grow. Acknowledge people and their work (a simple "thank you" can go a long way).
No matter what we call it, the bottom line is the best motivation comes from shared goals, purpose, and values instead of fear and guilt.
A YouTube video discussing Daniel Pink’s research and book is embedded above:
*A-R-C is an acronym coined by Blanchard International.