책/Why Incentive Plans Cannot Work

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Why Incentive Plans Cannot Work (hbr.org) - Your Highlight on Location 50-52 | Added on Wednesday, October 30, 2019 10:23:19 AM

Do rewards work? The answer depends on what we mean by “work.” Research suggests that, by and large, rewards succeed at securing one thing only: temporary compliance. When it comes to producing lasting change in attitudes and behavior, however, rewards, like punishment, are strikingly ineffective. ========== Why Incentive Plans Cannot Work (hbr.org) - Your Highlight on Location 54-55 | Added on Wednesday, October 30, 2019 10:23:40 AM

Incentives, a version of what psychologists call extrinsic motivators, do not alter the attitudes that underlie our behaviors. They do not create an enduring commitment to any value or action. Rather ========== Why Incentive Plans Cannot Work (hbr.org) - Your Highlight on Location 54-56 | Added on Wednesday, October 30, 2019 10:23:47 AM

Incentives, a version of what psychologists call extrinsic motivators, do not alter the attitudes that underlie our behaviors. They do not create an enduring commitment to any value or action. Rather, incentives merely—and temporarily—change what we do. ========== Why Incentive Plans Cannot Work (hbr.org) - Your Highlight on Location 56-57 | Added on Wednesday, October 30, 2019 10:25:51 AM

Rewards do not create a lasting commitment. They merely, and temporarily, change what we do. ========== Why Incentive Plans Cannot Work (hbr.org) - Your Highlight on Location 60-62 | Added on Wednesday, October 30, 2019 10:28:17 AM

collages. In general, the more cognitive sophistication and open-ended thinking that was required, the worse people performed when working for a reward. Interestingly enough, the researchers themselves were often taken by surprise. They assumed that rewards would produce better work but discovered otherwise. ========== Why Incentive Plans Cannot Work (hbr.org) - Your Highlight on Location 65-70 | Added on Wednesday, October 30, 2019 10:31:15 AM

A number of studies, however, have examined whether or not pay, especially at the executive level, is related to corporate profitability and other measures of organizational performance. Often they have found slight or even negative correlations between pay and performance. Typically, the absence of such a relationship is interpreted as evidence of links between compensation and something other than how well people do their jobs. But most of these data could support a different conclusion, one that reverses the causal arrow. Perhaps what these studies reveal is that higher pay does not produce better performance. In other words, the very idea of trying to reward quality may be a fool’s errand. ========== Why Incentive Plans Cannot Work (hbr.org) - Your Highlight on Location 82-83 | Added on Wednesday, October 30, 2019 10:33:28 AM

After the initial slump, Rothe found that in the absence of incentives the welders’ production quickly began to rise and eventually reached a level as high or higher than it had been before. ========== Why Incentive Plans Cannot Work (hbr.org) - Your Highlight on Location 88-89 | Added on Wednesday, October 30, 2019 10:34:52 AM

By contrast, training and goal-setting programs had a far greater impact on productivity than did pay-for-performance plans. ========== Why Incentive Plans Cannot Work (hbr.org) - Your Highlight on Location 95-98 | Added on Wednesday, October 30, 2019 10:36:23 AM

Over the long haul, however, the potential cost to any organization of trying to fine-tune reward-driven compensation systems may be considerable. The fundamental flaws of behaviorism itself doom the prospects of affecting long-term behavior change or performance improvement through the use of rewards. Consider the following six-point framework that examines the true costs of an incentive program. ========== Why Incentive Plans Cannot Work (hbr.org) - Your Highlight on Location 105-108 | Added on Wednesday, October 30, 2019 10:37:40 AM

just because too little money can irritate and demotivate does not mean that more and more money will bring about increased satisfaction, much less increased motivation. It is plausible to assume that if someone’s take-home pay was cut in half, his or her morale would suffer enough to undermine performance. But it doesn’t necessarily follow that doubling that person’s pay would result in better work. ========== Why Incentive Plans Cannot Work (hbr.org) - Your Highlight on Location 112-116 | Added on Wednesday, October 30, 2019 10:38:51 AM

Punishment and rewards are two sides of the same coin. Rewards have a punitive effect because they, like outright punishment, are manipulative. “Do this and you’ll get that” is not really very different from “Do this or here’s what will happen to you.” In the case of incentives, the reward itself may be highly desired; but by making that bonus contingent on certain behaviors, managers manipulate their subordinates, and that experience of being controlled is likely to assume a punitive quality over time. ========== Why Incentive Plans Cannot Work (hbr.org) - Your Highlight on Location 117-119 | Added on Wednesday, October 30, 2019 10:39:36 AM

Further, not receiving a reward one had expected to receive is also indistinguishable from being punished. Whether the incentive is witheld or withdrawn deliberately, or simply not received by someone who had hoped to get it, the effect is identical. And the more desirable the reward, the more demoralizing it is to miss out. ========== Why Incentive Plans Cannot Work (hbr.org) - Your Highlight on Location 122-123 | Added on Wednesday, October 30, 2019 10:41:29 AM

Managers are creating a workplace in which people feel controlled, not an environment conducive to exploration, learning, and progress. ========== Why Incentive Plans Cannot Work (hbr.org) - Your Highlight on Location 124-124 | Added on Wednesday, October 30, 2019 10:41:45 AM

Relationships among employees are often casualties of the scramble for rewards. ========== Why Incentive Plans Cannot Work (hbr.org) - Your Highlight on Location 124-125 | Added on Wednesday, October 30, 2019 10:42:01 AM

Relationships among employees are often casualties of the scramble for rewards. As leaders of the Total Quality Management movement have emphasized, incentive programs, and the performance appraisal systems that ========== Why Incentive Plans Cannot Work (hbr.org) - Your Highlight on Location 124-125 | Added on Wednesday, October 30, 2019 10:42:06 AM

Relationships among employees are often casualties of the scramble for rewards. As leaders of the Total Quality Management movement have emphasized, incentive programs, and the performance appraisal systems that accompany them, reduce the possibilities for cooperation. ========== Why Incentive Plans Cannot Work (hbr.org) - Your Highlight on Location 126-127 | Added on Wednesday, October 30, 2019 10:42:30 AM

“Everyone is pressuring the system for individual gain. No one is improving the system for collective gain. The system will inevitably crash.” Without teamwork, in other words, there can be no quality. ========== Why Incentive Plans Cannot Work (hbr.org) - Your Highlight on Location 128-129 | Added on Wednesday, October 30, 2019 10:43:58 AM

The surest way to destroy cooperation and, therefore, organizational excellence, is to force people to compete for rewards or recognition or to rank them against each other. For each person who wins, there are many others who carry with them the feeling of having lost. And the more these awards are publicized through the use of memos, newsletters, and awards banquets, the more detrimental their impact can be. Furthermore, when employees compete for a limited number of incentives, they will most likely begin to see each other as obstacles to their own success. But the same result can occur with any use of rewards; introducing competition just makes a bad thing worse. ========== Why Incentive Plans Cannot Work (hbr.org) - Your Highlight on Location 138-140 | Added on Wednesday, October 30, 2019 10:46:40 AM

In order to solve problems in the work-place, managers must understand what caused them. Are employees inadequately prepared for the demands of their jobs? Is long-term growth being sacrificed to maximize short-term return? ========== Why Incentive Plans Cannot Work (hbr.org) - Your Highlight on Location 138-141 | Added on Wednesday, October 30, 2019 10:46:54 AM

In order to solve problems in the work-place, managers must understand what caused them. Are employees inadequately prepared for the demands of their jobs? Is long-term growth being sacrificed to maximize short-term return? Are workers unable to collaborate effectively? Is the organization so rigidly hierarchical that employees are intimidated about making recommendations and feel powerless and burned out? ========== Why Incentive Plans Cannot Work (hbr.org) - Your Highlight on Location 138-142 | Added on Wednesday, October 30, 2019 10:47:00 AM

In order to solve problems in the work-place, managers must understand what caused them. Are employees inadequately prepared for the demands of their jobs? Is long-term growth being sacrificed to maximize short-term return? Are workers unable to collaborate effectively? Is the organization so rigidly hierarchical that employees are intimidated about making recommendations and feel powerless and burned out? Each of these situations calls for a different response. But relying on incentives to boost productivity does nothing to address possible underlying problems and bring about meaningful change. ========== Why Incentive Plans Cannot Work (hbr.org) - Your Highlight on Location 143-144 | Added on Wednesday, October 30, 2019 10:47:41 AM

Treating workers well—providing useful feedback, social support, and the room for self-determination—is the essence of good management. ========== Why Incentive Plans Cannot Work (hbr.org) - Your Highlight on Location 143-146 | Added on Wednesday, October 30, 2019 10:47:56 AM

Treating workers well—providing useful feedback, social support, and the room for self-determination—is the essence of good management. On the other hand, dangling a bonus in front of employees and waiting for the results requires much less effort. Indeed, some evidence suggests that productive managerial strategies are less likely to be used in organizations that lean on pay-for-performance plans. ========== Why Incentive Plans Cannot Work (hbr.org) - Your Highlight on Location 150-151 | Added on Wednesday, October 30, 2019 10:48:57 AM

pay for performance actually “impedes the ability of managers to manage.” ========== Why Incentive Plans Cannot Work (hbr.org) - Your Highlight on Location 153-155 | Added on Wednesday, October 30, 2019 10:50:47 AM

And here is the root of the problem. Whenever people are encouraged to think about what they will get for engaging in a task, they become less inclined to take risks or explore possibilities, to play hunches or to consider incidental stimuli. In a word, the number one casualty of rewards is creativity. ========== Why Incentive Plans Cannot Work (hbr.org) - Your Highlight on Location 160-160 | Added on Wednesday, October 30, 2019 10:52:08 AM

The late Cornell University professor, John Condry, was more succinct: rewards, he said, are the “enemies of exploration.” ========== Why Incentive Plans Cannot Work (hbr.org) - Your Highlight on Location 162-163 | Added on Wednesday, October 30, 2019 10:55:00 AM

When Locke paid subjects on a piece-rate basis for their work, he noticed that they tended to choose easier tasks as the payment for success increased. ========== Why Incentive Plans Cannot Work (hbr.org) - Your Highlight on Location 162-164 | Added on Wednesday, October 30, 2019 10:55:09 AM

When Locke paid subjects on a piece-rate basis for their work, he noticed that they tended to choose easier tasks as the payment for success increased. A number of other studies have also found that people ========== Why Incentive Plans Cannot Work (hbr.org) - Your Highlight on Location 162-164 | Added on Wednesday, October 30, 2019 10:55:15 AM

When Locke paid subjects on a piece-rate basis for their work, he noticed that they tended to choose easier tasks as the payment for success increased. A number of other studies have also found that people working for a reward generally try to minimize challenge. ========== Why Incentive Plans Cannot Work (hbr.org) - Your Highlight on Location 165-168 | Added on Wednesday, October 30, 2019 10:57:07 AM

Rather, people tend to lower their sights when they are encouraged to think about what they are going to get for their efforts. “Do this and you’ll get that,” in other words, focuses attention on the “that” instead of the “this.” Emphasizing large bonuses is the last strategy we should use if we care about innovation. Do rewards motivate people? Absolutely. They motivate people to get rewards. ========== Why Incentive Plans Cannot Work (hbr.org) - Your Highlight on Location 168-170 | Added on Wednesday, October 30, 2019 10:57:54 AM

If our goal is excellence, no artificial incentive can ever match the power of intrinsic motivation. People who do exceptional work may be glad to be paid and even more glad to be well paid, but they do not work to collect a paycheck. They work because they love what they do. ========== Why Incentive Plans Cannot Work (hbr.org) - Your Highlight on Location 172-173 | Added on Wednesday, October 30, 2019 10:59:21 AM

The more a manager stresses what an employee can earn for good work, the less interested that employee will be in the work itself. ========== Why Incentive Plans Cannot Work (hbr.org) - Your Highlight on Location 177-179 | Added on Wednesday, October 30, 2019 11:01:17 AM

“the research has consistently shown that any contingent payment system tends to undermine intrinsic motivation.” The basic effect is the same for a variety of rewards and tasks, although extrinsic motivators are particularly destructive when tied to interesting or complicated tasks. ========== Why Incentive Plans Cannot Work (hbr.org) - Your Highlight on Location 179-182 | Added on Wednesday, October 30, 2019 11:01:54 AM

Deci and Ryan argue that receiving a reward for a particular behavior sends a certain message about what we have done and controls, or attempts to control, our future behavior. The more we experience being controlled, the more we will tend to lose interest in what we are doing. If we go to work thinking about the possibility of getting a bonus, we come to feel that our work is not self-directed. Rather, it is the reward that drives our behavior. ========== Why Incentive Plans Cannot Work (hbr.org) - Your Highlight on Location 185-187 | Added on Wednesday, October 30, 2019 11:02:55 AM

Jonathan L. Freedman and his colleagues at the University of Toronto, confirmed that the larger the incentive we are offered, the more negatively we will view the activity for which the bonus was received. ========== Why Incentive Plans Cannot Work (hbr.org) - Your Highlight on Location 190-192 | Added on Wednesday, October 30, 2019 11:03:46 AM

Outside of psychology departments, few people distinguish between intrinsic and extrinsic motivation. Those who do assume that the two concepts can simply be added together for best effect. Motivation comes in two flavors, the logic goes, and both together must be better than either alone. But studies show that the real world works differently. ========== Why Incentive Plans Cannot Work (hbr.org) - Your Highlight on Location 192-194 | Added on Wednesday, October 30, 2019 11:04:14 AM

Some managers insist that the only problem with incentive programs is that they don’t reward the right things. But these managers fail to understand the psychological factors involved and, consequently, the risks of sticking with the status quo. ========== Why Incentive Plans Cannot Work (hbr.org) - Your Highlight on Location 194-198 | Added on Wednesday, October 30, 2019 12:21:01 PM

Contrary to conventional wisdom, the use of rewards is not a response to the extrinsic orientation exhibited by many workers. Rather, incentives help create this focus on financial considerations. When an organization uses a Skinnerian management or compensation system, people are likely to become less interested in their work, requiring extrinsic incentives before expending effort. Then supervisors shake their heads and say, “You see? If you don’t offer them a reward, they won’t do anything.” ========== Why Incentive Plans Cannot Work (hbr.org) - Your Highlight on Location 194-198 | Added on Wednesday, October 30, 2019 12:21:06 PM

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