How Companies Get Motivation WRONG!Kurt Nelson

Many companies get motivation right…

Many companies get motivation right…Yeah for them!

But many companies get motivation wrong

And some get it spectacularly wrong!

And some get it spectacularly wrong! Ouch!

And that’s not good

And that’s not goodDecreased Motivation Leads to: Lower productivityHigher turnoverDecreased sales Lack of creativity

In our work with companies across the country, we have had the opportunity to examine why this happens…

In our work with companies across the country, we have had the opportunity to examine why this happens…And understanding is the first step in getting it RIGHT

Here is a short list that describes just a few of the more common mistakes that we’ve seen Focus only on money No manager discretion No manager tools Too complex Wrong measure CommunicationFixated on costs

1. Focus too much on the drive to Acquire (i.e., the pay plan)

1. Focus too much on the drive to Acquire (i.e., the pay plan)Companies that do motivation right have a comprehensive plan that emphasizes more than just pay. They focus on:TeamworkWork EnvironmentWork/Life BalanceGrowth OpportunitiesNew Challenges Commitment to IdealsCorporate Identity Broader Purpose for Employee

Teamwork

Work Environment

Work/Life Balance

Growth Opportunities

New Challenges

Commitment to Ideals

Corporate Identity

Broader Purpose for Employee

2. Don’t give front line managers enough discretion

2. Don’t give front line managers enough discretion Front line managers typically have the greatest impact on individual employees perception about the company. Limiting how they can motivate or not trusting them to do it right decreases their motivational effectiveness.

3. Don’t give front line managers enough tools

3. Don’t give front line managers enough tools Companies that do motivation right provide their managers with:Motivational Training (e.g., “How to Motivate 101”)Discretionary Reward ProgramsEasy to Use ReportsMotivational Support from home office“On the Spot” Awards

Motivational Training (e.g., “How to Motivate 101”)

Discretionary Reward Programs

Easy to Use Reports

Motivational Support from home office

“On the Spot” Awards

4. Making incentives too complex

4. Making incentives too complexWhile companies might want to make their IC plans more complex to try to ensure fairness or meet certain budget expectations…The morecomplex and harder they are to understand, the less effective incentive plans are at driving behavior change.

5. Rewarding the wrong things

5. Rewarding the wrong things Too often, companies good intentions can lead to rewarding the wrong behavior. The most common mistakes:Rewarding things that are not in alignment with strategyReward things because they are easy to measureRewards have become entitlements and perceived as “unchangeable”

6. Not communicating enough

6. Not communicating enoughHighly motivating companies over communicate to their employees – regarding their: Pay Plans Total Rewards Strategy Reward Culture Company Mission All of these are vital to a highly motivated workforce.

Pay Plans

Total Rewards Strategy

Reward Culture

Company Mission

7. Focusing on the “cost” of motivational programs – not the results

7. Focusing on the “cost” of motivational programs – not the results Focusing on the “cost” of a program is short sighted. The real focus should be on the motivation that the program instills and the results or “lift” the program has on performance. Cheapest isn’t always the best!

Does any of this sound familiar?

The real question is…

The real question is… what to do about this?

First recognizing where we tend to go wrong is key

First recognizing where we tend to go wrong is key We just covered that…

Then we merge theory and expertise to develop solutions using…

Then we merge theory and expertise to develop solutions using… The 4-Drive ModelEmployee MotivationofLawrence & Nohria2002

AcquireBondChallenge & ComprehendDefendThe 4-Drives

AcquireBondChallenge & ComprehendDefendWe need to focus on ALL 4 Drivestogether (not just Acquire)

Then give front line managers the tools, the training and the discretion to use them effectively

Then give front line managers the tools, the training and the discretion to use them effectivelyTools:Easy to use sales or performance reportsManager discretionary incentives (cash and non-cash)Simple “On the Spot” Awards Recognition programs – peer-to-peer, manager nominated, VP review Training on how to use rewards effectively / motivate employees Discretion: Provide Managers with clear objectivesCreate rules that are flexible enough to accommodate Managers special situationsMonitor only for bias and cheating Utilize online platforms to manage programs and provide flexibility Direct access to IC/HR team

Easy to use sales or performance reports

Manager discretionary incentives (cash and non-cash)

Simple “On the Spot” Awards

Recognition programs – peer-to-peer, manager nominated, VP review

Training on how to use rewards effectively / motivate employees

Provide Managers with clear objectives

Create rules that are flexible enough to accommodate Managers special situations

Monitor only for bias and cheating

Utilize online platforms to manage programs and provide flexibility

Direct access to IC/HR team

Simplify, simplify, simplify

Simplify, simplify, simplifyRework your incentive plans to simplify them: Reduce the number of items you’re paying on (3 or less is best) Focus only on key results that people have control overSimplify the math for calculating earnings/winningLimit the number of qualifiers, multipliers, kickers or other factors

Conduct an analysis on what behaviors your reward programs are driving

Conduct an analysis on what behaviors your reward programs are drivingConduct research to ensure that your programs are: Driving behavior that is in-line with company strategy (e.g., profit not just revenue)Measuring the appropriate results / behaviors and not just those that are easy to quantifyHave not become so entrenched that they are perceived as entitlements and not incentivesLeveraging (not duplicating) other incentives or pay plans in the behaviors they are rewarding

And make sure that this is ALL communicated with a PASSION!

And make sure that this is ALL communicated with a PASSION!Utilize live meetings, well done Power Point presentations, professional print and online communications, voice mails, flash e-mails, memo’s, manager talking points, posters, etc…

Finally – don’t let Purchasing focus you just on the direct cost of a program – make sure you look at how the program drives motivation and results.

Finally – don’t let Purchasing focus you just on the direct cost of a program – make sure you look at how the program drives motivation and results. A program that increases sales performance 1% at a $1Billion dollar company = $10 Million in additional sales

Finally – don’t let Purchasing focus you just on the direct cost of a program – make sure you look at how the program drives motivation and results. A program that increases sales performance 1% at a $1Billion dollar company = $10 Million in additional salesThat might just be worth a few extra thousand!

Make sure that you don’t make a motivational…

Take Action Today!

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