Incentive Programs: Strong Motivators with Dangerous Pitfalls
By Daniel Chao General Manager, Novotel Nanjing East and Novotel Nanjing Central | July 12, 2015
In the 1920s Ralph von Koenigswald set out for Java to search for bones of early hominids. To maximize his chance for success he devised an incentive scheme – offering a cash bonus to locals for any ancient bones they brought him. In order to maximize their incentive pay out the locals would smash any large bones they found into small pieces and collect for each piece.
Von Koenigswald's incentive scheme was poorly thought out and the loss to the scientific community was enormous – large priceless bones of our earliest ancestors were destroyed and Von Koenigswald wound up with thousands of useless shards.
At first glance designing an incentive scheme seems simple and straight forward: "in order to promote performance, for each successful action "X" I will offer "Y". But there are many questions that need to be considered before implementation.
Demotivating Other Key Tasks (working only for incentive):
Before implementing an incentive scheme you need to determine whether the task or goal to be incentivized is a key financial driver or a key task in the team members job description. It's important to remember that your team members will likely devote a significant amount of their time to attaining offered incentives so you need to be sure at the outset that either:
- The task in question is a significant driver of revenue
- It is a key component of the employee's job description
- The task is by its nature limited in the amount of time or effort that can
be devoted to it.