Repost: We are NOT rational beings so why do we try to make rational incentive programs?

Take the blndfolds offTake off our rational blindfolds…

Dan Airely, Richard Thaley, Cass Sunstein, Daniel Kahneman, Ran Kivitz, and many more psychology and behavioral economics  researchers have shown that while we like to think of ourselves as rational, thinking human beings who are out to optimize our well being, we aren’t.

In fact, we are very far from it.

Sharon Begley at Newsweek wrote this interesting blog “The Limits of Reason” in it, she states, “But as psychologists have been documenting since the 1960s, humans are really, really bad at reasoning. It’s not just that we follow our emotions so often, in contexts from voting to ethics. No, even when we intend to deploy the full force of our rational faculties, we are often as ineffectual as eunuchs at an orgy.”

We see this all the time.  I wrote about it in my earlier post from today “5 Lessons from the Maze.”  We tend to act and behave in very non-rational ways.  There are lots of irrational types of behavior and thinking and lots of theory’s about them (i.e., Loss Aversion, Status Quo Bias, Gambler’s Fallacy, Hedonistic Bias, Anchoring, Reciprocity, Inequity Aversion, etc…).

Here is what is interesting – we tend to still design our incentive programs and our motivational strategies based on believing that people act in a rational manner. We create programs that have 10 different ways to earn, with multipliers, qualifiers, and ratchet effects.  We create programs with multiple components and factors that we think will drive specific behaviors and elicit particular performance results.  We believe we know what people want and use only extrinsic rewards to drive our results.

Ouch! Continue reading “Repost: We are NOT rational beings so why do we try to make rational incentive programs?”

There is always that one client who drives you NUTS…

This is a true story of what happened to me and one client.Driving me nuts

It began in August.  I was contracted to conduct an analysis for a company that will remain unnamed.  The analysis looked at some specific aspects around a new product launch and involved interviewing a number of executives and sales people from across the organization.  In all I did over 40 hours of interviews.  I spent twice that amount of time analyzing the interview responses, finding patterns and insights that applied to their specific situation, assessing linkages and developing insights.

I created a comprehensive report that included an executive summary, detailed findings, recommendations for success, and a large section with selected verbatim comments from the interviews.

I thought it was pretty good.  We uncovered a lot of useful information regarding the launch process,  the sales force readiness, and the work that needed to happen leading up to the launch that could really help the company be more successful.  We had taken the pulse of the organization and reported it back in a clear and informative manner.

I’m not just tooting my own horn – the client was very pleased with the content and the findings also.  No really he was. In fact, he stated in an e-mail, “I’m very happy with the content and findings and I’m glad I used your services…”

Great.  Well done.  End of story – right?

Not so fast… you knew something else was coming…. Continue reading “There is always that one client who drives you NUTS…”

A New Motivational Model Using the 4-Drives: Upcoming in 2011

Ok, this is a little bit of a teaser…we are in the process of doing a major overhaul of how we look at the 4-Drive Model.  We’ve talked about the need to update this model before (see here and here).  We are underway in getting that developed and should be launching it the first quarter of 2011.

Here is a sneak peak…the four main motivations as we’ve defined them are now renamed and constitute different elements:

1.  Personal Motivation- focus on the intrinsic motivators that we have and encompasses the Drive to Challenge & Comprehend

2. Reward Motivation- focus is on the extrinsic motivators that we have and encompasses the Drive to Acquire & Achieve

3. Social Motivation- focus is on the social drives that motivate us and includes the Drive to Bond & Belong

4. Passion Motivation (this name is still being hotly debated – but for now its what we are running with)… – focus is on the motivational element of purpose and passion – including defending one’s honor and tribe Continue reading “A New Motivational Model Using the 4-Drives: Upcoming in 2011”

Rethinking the 4-Drive Model of Employee Motivation

I have been touting the 4-Drive Model of Employee Motivation since I first read the 2008 Harvard Business Review article “Employee Motivation: A Powerful New Model” by  Nohria, , Groysberg, and Lee.   It is a powerful theory on human motivation in general, and in particular, employee motivation.  First presented in the 2002 book, “Driven: How Human Nature Shapes Our Choices” by Lawrence and Nohria, the model outlines four main drives of motivation.

At the Lantern Group, we’ve been working with this model for almost three years now.  We’ve posted on it several times in this blog (see 4-Drive Model here, Impact on Leaders here, and other info here, here, here, here and here for just a few examples).

It’s  good – but not perfect.

Right away we realized that it needed to be tweaked. Continue reading “Rethinking the 4-Drive Model of Employee Motivation”

How Well Does Your Organization Stack Up? Guest blog by Paul Schoening

As the hiring outlook improves with anticipation of the new calendar year on the horizon, election dust settling and corporate tax liability gaining clarity, the talent exodus will begin in next few months.

Are you ready?

If your organization has not installed proactive mitigation efforts, you could lose your best talent over the next 2 quarters (in other words, if your not doing something now, you’re going to pay for it later).  Successful recession recovery strategy should not ignore the critical variable of having the best talent on-board as well as engaging the “survivors”, lest ye not forget;

“High-commitment organizations outperform low-commitment organizations by 47%”

Watson Wyatt

“Engaged  employees are 43% more productive.”

The Hay Group

Our research shows that engaged employees can increase your financial position by almost 200% while disengaged employees can decrease your financial position by almost 25%.

http://www.globalstrategicmgmt.com/engaged- employees.

“In high-growth organizations, 84% of employees know where the organization is headed. In low-growth organizations, only 52% do.”

In Momentum

“Dependence  on remote forms of communication has left many younger workers bereft of interpersonal skills.:

Fast Company

“Camaraderie  between co-workers fuels much more than new business leads – relationships are also key drivers for recruiting, engagement and retention.”

Talent Management Magazine

Must we go on with the quotes? These are some pretty credible sources I might add. Continue reading “How Well Does Your Organization Stack Up? Guest blog by Paul Schoening”

Survivor: Corporate America edition – Guest blog by Paul Schoening

Survivor “Damn Lucky”

Counter-intuitively, organizations tend to find difficulty prioritizing their employee engagement efforts during challenging environments. In fact, during this recession many have executed a status quo strategy, which communicates to their single greatest resource that you are “damn lucky to still be here”. Take a moment to think about this – has this been your organizations approach to engagement?

Therein lies the issue! If we tell our recession survivors they’re lucky to have a job and yet we label them our greatest remaining resource, we are sending mixed messages.

My Story Continue reading “Survivor: Corporate America edition – Guest blog by Paul Schoening”