USE RANDOM REWARD SYSTEMS
Karen had twelve employees on her team and she considered herself a pretty good manager and leader. She was fortunate enough to work for an organization that empowered its managers to structure incentive and motivation programs uniquely to fit the individualism of the teams. Karen had carefully crafted a systematic incentive and reward system that would provide additional benefits when her team members would reach specific targets. She also set up a lunch meeting with her entire team the first Friday of every month at a really nice restaurant just to show her appreciation for all of their hard work. Karen was considering the implementation of another reward for her team members, but wanted to run it by Wes first and get his input. Wes was also a team leader in the same organization but Karen had noticed that his production numbers were higher on his team, conflict and absenteeism were lower, and morale was higher. She invited Wes to lunch to talk about her ideas.
“So Wes, I’ve noticed how great your team is doing and I know you’re a big proponent of reward systems. I use rewards with my team too, as you know, and we are doing pretty darn good, but I think we can do better. I wanted to run an idea by you that I had for my team.I was thinking about a couple of things to increase my current reward program and try to get production and morale up. One idea is to give employees a $100 gift card when they reach a certain level of production in addition to their regular bonuses. I was also thinking about having an annual team picnic where the team members can bring their family and socialize with other employees. I’m trying to find ways to keep morale and motivation up and I know rewards and incentives are highly recommended. They seem to work pretty well for you.”
“You know Karen, I don’t usually tell people where I think they are going wrong unless they ask me for my input. But since you’re asking, I’m going to have to be really honest with you. Systematic reward programs do more harm than good. I’m not a fan.”
Karen set her sandwich down and said, “I’m confused. You use reward programs yourself. If you don’t think they work, why do you use them?”
“Because mine work. They’re not systematic. They’re random. Systematic reward programs become expected by employees and eventually become an entitlement. Take your monthly lunch for example. The first Friday of every month you take your team out to a really nice lunch. The reward itself is great and I’m sure the team loves it, but you’ve made it systematic. Now they expect it every month. How do you think they would react if you stopped doing it? What if your team budget got cut and you couldn’t do that every month or what if you just wanted to stop doing it and try something different?”
Wes continued before she could respond. “Take your incentive program too. The team members know when they reach a certain level of production that they will get a certain amount of reward money. That creates a couple of problems. One problem you have is determining what level to set. If you set it too high, they can’t reach it and not getting the reward is seen as a punishment. If you set it too low, you discourage risk-taking and creativity and employees won’t try hard enough. Systematic rewards that are used as preemptive bribes to get what you want from an employee can actually be perceived in the same way as punishments. Another problem you face is this: when you get the employee focused on primarily monetary types of rewards, you diminish the employee’s ability to tap into their own intrinsic motivation, the incredible feeling of accomplishment, and the fulfillment that comes from a job well done. If your main focus is on monetary rewards, you actually hinder intrinsic motivation because there is no other reason for your employees to put forth extra effort. I’m not just spouting off here Karen. I have actually done a lot of research on this. Most reward and incentive programs create a temporary spike in production but do little to create long term changes in behavior or incentive to do better.”
“Wes I’m just really surprised to hear all of this from you. I thought you were a big proponent of rewards.”
“I am. Just not systematic rewards. There is a big difference between rewarding your employees randomly and setting up rewards that they expect.”
“Well how do you prevent people from feeling like it’s unfair if it’s just random?” Karen’s intrigue was peaked.
Wes continued. “Random doesn’t mean unfair and it doesn’t mean I am inconsistent in giving rewards… it just means the rewards are not predictable or expected at a specific time or based on a specific number. I am still fair in how I dispense random rewards. I make sure all of the team members are shown appreciation, just in different ways and sometimes at different times. If the rewards are systematic and expected by any employee, the rewards inevitably become an entitlement and actually cause more harm than good. I take my team members to nice lunches too—I just don’t do it every month and I certainly wouldn’t do it on the same day each month. It would then be expected and if I stopped doing it, they would resent me. I give lots of rewards, but they never know when the rewards are coming. And not all rewards have to cost money either. Specific, immediate, and positive feedback is a great reward for employees.Just consider trying some random rewards and see how it affects the team. Last month, my team had an amazing month as far as productivity and team effort. I surprised the team by having two limos pull up to the front of the building on a Friday. I announced that the team had the rest of the day off and would be taken in limos to lunch and a two-hour cruise to wherever they wanted to go. Cheers erupted through the office as everyone raced to the limos. I have never seen people update their status on Facebook so quickly! They all wanted everyone to know what they were doing.” Wes was beaming with excitement as he shared the story.
Karen took a sip of her iced tea. “That sounds really fun, but also really expensive.”
“But it’s really not when you think about it. Because I am not spending all that money on systematic incentives and rewards for the team, I can afford to do random rewards. I also don’t just do it as a team. I do it individually too, based on the personal preferences of my team members. I have one person who absolutely loves coffee. I noticed last week that she stayed over after work to help one of our clients solve a problem. I called her favorite coffee place and had them put together a small basket of coffee goodies. She went absolutely nuts over it. What I am suggesting takes more time and investment in knowing your team members, but the pay-off is incredible.”
Karen asked, “So how do you encourage higher productivity?”
“Well I start with instilling the mission, vision, and core values in my team, which is a deeper intrinsic motivator than rewards. But I also use random rewards to inspire the team members to stay excited about the fun parts of the job. My job is to create an environment where creativity, risk-taking, fun, and productivity can all take place at the same time. This is what keeps morale high and team cooperation flowing. If I have my team members competing for certain bonuses or rewards, it creates a more confrontational environment with jealousy.”
Karen needed to cut in. “So you don’t reward your employees for any production goals at all?”
“Not in the traditional way,” Wes replied. “I pay them all a percentage of our net production. This gives them all a reason to help keep production up and expenses down and they don’t feel ‘punished’ if a particular number is not met. When I moved over to this system, production actually went up! They weren’t all hung up on reaching a particular level that they were most likely capable of surpassing. Creativity and risk-taking increased and so did morale. I also make sure that I reward the top producers in different ways as well.”
Karen shook her head and smiled. “Well I must say… this meeting is not at all what I expected. You do things so differently but your ideas obviously work. You don’t mind if I try some of your ideas out on my own team do you?”
“Not at all!"
-Excerpt from Kimberly Alyn's book titled How to Inspire People to Achieve More
“So Wes, I’ve noticed how great your team is doing and I know you’re a big proponent of reward systems. I use rewards with my team too, as you know, and we are doing pretty darn good, but I think we can do better. I wanted to run an idea by you that I had for my team.I was thinking about a couple of things to increase my current reward program and try to get production and morale up. One idea is to give employees a $100 gift card when they reach a certain level of production in addition to their regular bonuses. I was also thinking about having an annual team picnic where the team members can bring their family and socialize with other employees. I’m trying to find ways to keep morale and motivation up and I know rewards and incentives are highly recommended. They seem to work pretty well for you.”
“You know Karen, I don’t usually tell people where I think they are going wrong unless they ask me for my input. But since you’re asking, I’m going to have to be really honest with you. Systematic reward programs do more harm than good. I’m not a fan.”
Karen set her sandwich down and said, “I’m confused. You use reward programs yourself. If you don’t think they work, why do you use them?”
“Because mine work. They’re not systematic. They’re random. Systematic reward programs become expected by employees and eventually become an entitlement. Take your monthly lunch for example. The first Friday of every month you take your team out to a really nice lunch. The reward itself is great and I’m sure the team loves it, but you’ve made it systematic. Now they expect it every month. How do you think they would react if you stopped doing it? What if your team budget got cut and you couldn’t do that every month or what if you just wanted to stop doing it and try something different?”
Wes continued before she could respond. “Take your incentive program too. The team members know when they reach a certain level of production that they will get a certain amount of reward money. That creates a couple of problems. One problem you have is determining what level to set. If you set it too high, they can’t reach it and not getting the reward is seen as a punishment. If you set it too low, you discourage risk-taking and creativity and employees won’t try hard enough. Systematic rewards that are used as preemptive bribes to get what you want from an employee can actually be perceived in the same way as punishments. Another problem you face is this: when you get the employee focused on primarily monetary types of rewards, you diminish the employee’s ability to tap into their own intrinsic motivation, the incredible feeling of accomplishment, and the fulfillment that comes from a job well done. If your main focus is on monetary rewards, you actually hinder intrinsic motivation because there is no other reason for your employees to put forth extra effort. I’m not just spouting off here Karen. I have actually done a lot of research on this. Most reward and incentive programs create a temporary spike in production but do little to create long term changes in behavior or incentive to do better.”
“Wes I’m just really surprised to hear all of this from you. I thought you were a big proponent of rewards.”
“I am. Just not systematic rewards. There is a big difference between rewarding your employees randomly and setting up rewards that they expect.”
“Well how do you prevent people from feeling like it’s unfair if it’s just random?” Karen’s intrigue was peaked.
Wes continued. “Random doesn’t mean unfair and it doesn’t mean I am inconsistent in giving rewards… it just means the rewards are not predictable or expected at a specific time or based on a specific number. I am still fair in how I dispense random rewards. I make sure all of the team members are shown appreciation, just in different ways and sometimes at different times. If the rewards are systematic and expected by any employee, the rewards inevitably become an entitlement and actually cause more harm than good. I take my team members to nice lunches too—I just don’t do it every month and I certainly wouldn’t do it on the same day each month. It would then be expected and if I stopped doing it, they would resent me. I give lots of rewards, but they never know when the rewards are coming. And not all rewards have to cost money either. Specific, immediate, and positive feedback is a great reward for employees.Just consider trying some random rewards and see how it affects the team. Last month, my team had an amazing month as far as productivity and team effort. I surprised the team by having two limos pull up to the front of the building on a Friday. I announced that the team had the rest of the day off and would be taken in limos to lunch and a two-hour cruise to wherever they wanted to go. Cheers erupted through the office as everyone raced to the limos. I have never seen people update their status on Facebook so quickly! They all wanted everyone to know what they were doing.” Wes was beaming with excitement as he shared the story.
Karen took a sip of her iced tea. “That sounds really fun, but also really expensive.”
“But it’s really not when you think about it. Because I am not spending all that money on systematic incentives and rewards for the team, I can afford to do random rewards. I also don’t just do it as a team. I do it individually too, based on the personal preferences of my team members. I have one person who absolutely loves coffee. I noticed last week that she stayed over after work to help one of our clients solve a problem. I called her favorite coffee place and had them put together a small basket of coffee goodies. She went absolutely nuts over it. What I am suggesting takes more time and investment in knowing your team members, but the pay-off is incredible.”
Karen asked, “So how do you encourage higher productivity?”
“Well I start with instilling the mission, vision, and core values in my team, which is a deeper intrinsic motivator than rewards. But I also use random rewards to inspire the team members to stay excited about the fun parts of the job. My job is to create an environment where creativity, risk-taking, fun, and productivity can all take place at the same time. This is what keeps morale high and team cooperation flowing. If I have my team members competing for certain bonuses or rewards, it creates a more confrontational environment with jealousy.”
Karen needed to cut in. “So you don’t reward your employees for any production goals at all?”
“Not in the traditional way,” Wes replied. “I pay them all a percentage of our net production. This gives them all a reason to help keep production up and expenses down and they don’t feel ‘punished’ if a particular number is not met. When I moved over to this system, production actually went up! They weren’t all hung up on reaching a particular level that they were most likely capable of surpassing. Creativity and risk-taking increased and so did morale. I also make sure that I reward the top producers in different ways as well.”
Karen shook her head and smiled. “Well I must say… this meeting is not at all what I expected. You do things so differently but your ideas obviously work. You don’t mind if I try some of your ideas out on my own team do you?”
“Not at all!"
-Excerpt from Kimberly Alyn's book titled How to Inspire People to Achieve More
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