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Why Incentives Are a Tool of the Lazy Manager

Jeff Toister | Jun 17, 2017 173 views 6 Comments

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"Let's create an incentive plan!" 

That's the rallying cry for lazy managers. Whether its lagging customer service survey scores, poor productivity, or dismal attendance, lazy managers think the solution is an an incentive.

Or perhaps a disincentive will do the trick! 

A three strikes and yer out sort of thing where bad employees receive marks on their permanent employment record which shouldn't really be called permanent because we all know that employee won't be there for very long anyway.

Why are incentives a tool of lazy managers

The short answer is incentives represent an apparent quick fix, which is tempting to a manager who doesn't want to put in the real work.

Here's a deeper look.

Who is Actually Motivated?

In a 1968 Harvard Business Review article, psychologist Frederick Herzberg made an interesting observation about incentives.

It's the manager who is motivated, not necessarily the employee.

A manager might be motivated to improve customer service survey scores. Perhaps it's part of her job review or she's catching some flak from senior leadership. Maybe the manager is competitive and just wants her department to have the best score.

Whatever the reason, she's desperate for results so she creates an incentive for employees who receive good survey scores.

But what about the employees?

The employees aren't really motivated to deliver better service. Better service isn't even part of the incentive. The incentive focuses on good survey scores, which is a crucial distinction.

So the employees might be motivated to earn the incentive. And some will step outside the lines to do it, even resorting to survey begging.

What the Lazy Manager Misses

A motivated employee wants to do something.

If employees are motivated to deliver better customer service, they'll willingly put in extra effort and find their way around obstacles. Motivated employees will look at poor customer service survey scores as an opportunity to learn and get better, not a disastrous set-back in their quest to earn an incentive.

The lazy manager doesn't see this. 

In my experience, the lazy manager will tell employees that survey scores need to improve. She'll announce the incentive and she might explain why improvement is important to her. ("My boss is really upset about our latest survey scores!")

But she won't explain why the improvement is important to the employees, the company, or even the customers. She also won't make a connection between her goals and what the employees want to achieve.

Lazy managers leave out the "Why?" completely when organizing an incentive plan.

They're too lazy to investigate what's causing lower survey scores. They don't take the time to involve and engage employees. They just want quick action.

A Better Way

Let's say you have an attendance problem.

The lazy manager will resort to an incentive (perfect attendance awards!) or a disincentive. Many customer service teams have elaborate attendance policies that make your head spin. And every one of those managers complains about employees who abuse the policy and do just enough to keep their job.

There's a better way.

  • What if you made work a place employees wanted to come to?
  • What if you had a customer service vision that gave employees a clear purpose?
  • What if you hired people who wanted to do what you wanted them to do?

The problem with this plan is it takes time. The benefit is it works.

Daniel Pink decoded many myths of about employee motivation in his best-selling book, Drive. He discovered that employees really crave three things:

  1. Purpose. There's got to be a point to all this work.
  2. Mastery. We want the ability to be good at what we do.
  3. Autonomy. It's good to have some measure of control over the work we perform.

(You can read a review of the book and it's application to customer service here.)

The short version is lazy managers won't take that time. They'll look for a shortcut and that shortcut is usually an incentive.

When I did research for The Service Culture Handbook, I never once heard a customer service leader talk about incentives as the key to a customer-focused culture. What I did consistently hear was leaders describing building a great service culture as a time-consuming task that required long-term commitment. 

These managers achieved success because they were willing to put in the extra work.

Republished with author's permission from original post.


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6 Responses to Why Incentives Are a Tool of the Lazy Manager

  1. Chip R. Bell June 18, 2017 at 5:38 am (182 comments) #

    Jeff, your great post reminds me of the work of Doug “Theory X and Y” McGregor we all studied in Psychology 101. Approaches to the topic of worker motivation start with ones beliefs or philosophy about people and the reasons they work. Theory X prescriptive managers (not leaders) take the approach: “They don’t want to be here and they don’t like what they are being told to do, so I need a compelling carrot and a large stick.” While the choice of “incentives” is exaggerated (never heard of an employee being hit with a stick), the point is the same. It is grounded in a view that people are inherently evil and need to be controlled and “managed.” (See Lord of the Flies for a reference!)

    Theory Y leaders believe employees are inherently good, enjoy working (especially when there is a valued mission), are inherently eager to thrive, and do not require “three cherries in a row” to continue pulling the lever of their toil. I believe you are right to say “incentives” might be more gratifying to the manager since it convinces them it is their control of the work version of a one-armed bandit that is driving the result.

    Commitment does not come from extrinsic rewards but by internal zeal. Would a great athlete, rock star, or famous actor give up their game if their salary stopped being in the hemisphere? Notice how they keep performing with diligence long after they have acquired more wealth than they can spend in a lifetime. We do not need new incentive systems; we need more focus on creating cultures that surface and nurture commitment, not compliance; motivation, not movement.

    While in an airport recently I asked the man working at the shoe shine stand, “Please put a great shine on these boots.” He responded with a metaphor. “Sir, the great shine is already in your boots. I just work with the paste and brush to bring it out.” Employees need the work version of paste and brush to help surface and brighten the greatness that is already there.

  2. Michael Lowenstein June 18, 2017 at 5:50 am (1287 comments) #

    Agree with Daniel Pink’s, and your, perspectives re. employees; however, I’d like to add some thoughts. Where do lazy managers and unmotivated employees come from? They are a function of poor, inconsistent leadership, training and reward aimed at alignment and productivity, and a poor, non-cohesive, non-value delivery-focused culture. In the case of employees, initiatives for rallying and motivating them are often left up to HR; and this group resorts to ‘carrot and stick’ methods coming out of satisfaction and engagement.

    It’s easy to identify companies that are more evolved where customer and employee experience value are concerned. One of my best examples was MBNA, once the second largest issuer of credit cards in the U.S. – and highly loyal customers and employees – before being acquired by Bank of America some years back. The financial services industry gets a fairly well-deserved rap for making many insurance, investment, and banking transactions and experiences too complex, time-consuming, and commoditized. For employees, and the processes they apply, the rule here should be, as MBNA used to preach and practice (before being acquired by Bank of America): “Think Of Yourself As A Customer.” Customers will always lean toward, and trust, simplicity because it feels more honest and open. Employees were motivated with a monetary incentive for delivering customer value; however, their customer=oriented behavior was baked-into a culture of proactive, value-based service provision. MBNA had great leadership, a great stakeholder-centric culture, highly positive customers, and committed employees.

  3. Dennis Gershowitz June 18, 2017 at 12:50 pm (6 comments) #

    Jeff, Good article. I wish to tag along with Michael. I have always felt that incentives are a cheap way out of being a stronger and better leader, one who creates that environment people want to be a part of, one who gets employees engaged, one who understands the worth and value of an employee and has helped them see the same, etc. My experience has been that incentives are temporary and then people look for the ones that follow. As you point out, one may be a lazy leader, but I also want to add on…are they a leader at all?

  4. Andrew Rudin June 19, 2017 at 7:52 am (208 comments) #

    I regularly encounter business strategies and tactics that are ineffective, and they occur in virtually every department in an organization. But it’s often confusing to extract whether the practice is bad, or whether it’s misused or misapplied. I’ve suffered the same confusion.

    And, I suspect, based on the overwhelming number of headlines I read titled [Name of purported heinous practice] is Dead!, others do, as well. While I don’t question that some managers are lazy, I don’t believe that a manager’s use of incentive pay is necessarily an indicator of laziness.

    Including incentives in pay plans is not a bad practice. Like any other tool, they can be implemented poorly, or for the wrong reasons. As I discussed in an article, Teach Your Sales Force Well: Learning from Pay for Performance (http://www.contrarydomino.com/blog/2015/07/teach-your-sales-force-well-learning-from-pay-for-performance), companies engage in incentive pay for four reasons:

    1. Motivation
    2. Communication
    3. Risk sharing
    4. Screening

    I did not originate these points – they came from Cornell University professor Rob Bloomfield, who wrote an e-book that I referenced for the article titled, What Counts and What Gets Counted – Seeing Organizations Through an Accountant’s Eyes. (My article contains a link to the e-book.)

    Daniel Pink’s points are great, but without a #4, “Earn at least a living wage,” they’re polyanna. Too many times I’ve seen companies trumpet how great they are (or, more accurately, now great they think they are) at offering #’s 1 – 3, only to chump their employees out of a fair wage. This is where incentives come in.

    Incentives are motivating, though it’s a fair knock that companies often don’t think through to understand the behaviors that their incentives are going to drive. And not all of those behaviors are benign. I write about the abusers every year in my annual installment of the Sales Ethics Hall of Shame.

    Second, more than any written ideals to be found in a corporate mission or vision statement, incentives communicate strongly what a company values. Words are words. Incentives put money where your mouth is, so to speak. To me, that’s one artifact of good leadership: Believing in something so strongly that you assign tangible value to producing it – not just milling tweets and hollow vision statement platitudes.

    Third, without incentives, companies would be severely hindered in their ability to grow. Without incentives and variable pay, companies simply wouldn’t be able to afford to recruit and keep talent. Incentives allow organizations to share risks, and to reward employees appropriately when the right outcomes are achieved.

    Finally, incentives help screen job candidates. When incentive pay is included in the compensation plan, employees who are not confident in their ability to excel at that requirement will often self-select out of the interview process.

    These capabilities of incentive pay support the idea that incentives are not wrong. But like anything else, they can be implemented the wrong way, and for the wrong reasons.

  5. Jeff Toister June 19, 2017 at 8:27 am (93 comments) #

    @Chip – thanks for your comments. You’re absolutely right about this being Psychology 101. Interesting that you shared the story of an airport shoe shine stand. It’s a job where you are figuratively humbled (shining shoes), yet you so often see men and women in that profession who are incredibly friendly and engaging.

    @Michael – you’re right that there’s often a larger system in play that guide instinctive behaviors. I think it’s much more difficult to recognize that and move against the grain.

    @Dennis – the funny thing about your question is you can ask a room full of 20 executives to define leadership and you’ll probably get 20 different answers. Perhaps that’s why it’s so much of a puzzle. How can we develop something when we can’t even agree on a definition!

  6. Jeff Toister June 19, 2017 at 8:31 am (93 comments) #

    @Andrew – Thanks for offering your counterpoint. While it seems we disagree on many points, I appreciate you taking the time to share.

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