Do Incentives Really Raise Performance?

Do Incentives Really Raise Performance?

03 May 11:00 by Alan Jarque


We can all picture that spoilt child from our schooldays. They had all the latest gadgets, pocket money jangling as they walked and they were never far from an ice-cream or maybe the latest comic. Their parents are utterly taken for granted, pandering to their child’s every whim. When incentives become the norm, it is quickly taken for granted.

Then picture the fabled donkey following the carrot, except in this case the donkey is following a trail of carrots, spaced closely together, greedily gobbling up each one he goes. He expects the regular incentive, and the rewards keep coming, no matter what his behaviour. Is an incentive still an incentive if is isn’t promoting a change in behaviour anymore?

If offered for the right reasons, and awarded for the right behaviours, there is every chance that a reward can spark peak performance. Corporates have long seen their “bonus” as the figurative carrot to dangle in front of employees, but it only holds value if employees feel that they have to earn it. In the same way, over the past 5 years, corporate “perks” have become ever more extravagant, but they have become so universally available that I am not sure that they make an incremental difference to performance anymore.

There will always be toilers and slackers in this world. The toilers will give 100%, with no need for a carrot, but true toilers are few and far between. The rest of us will all have a percentage of “slacker” in our personality, and sometimes we need that little extra motivation to go the extra mile. If that motivation is truly aligned to the results, we will often make the effort, but if we will get that motivation irrespective of results, why should we make the extra effort? To my mind, that is the issue with many of the corporate perks in the modern business. These perks are too widely available, they are thus taken for granted, and when economic times get a little tougher (as they are in Silicon Valley currently), when firms cut back on the perks, they risk ill-will from a workforce that was lucky to have them in the first place.

I am no expert on the subject, but in my experience of recruitment, the best incentive schemes are where individual efforts are motivated by individual rewards. This may also be the case for a team, but here an “individual reward” means something that is unique to that team on completion of a certain target. If a company seeks to understand what motivates each individual, and offers a range of potential “carrots” to promote peak performance, the incentive scheme has every chance of hitting the mark.

Some people might value an extra day’s holiday. Others might want a weekend break away. Teams should be able to choose what they want to do rather than be packed away on a rainy paintball outing. If the incentives are tailored and appealing, the compulsion to hit your targets will be unrelenting.

There is also something deeply satisfying about only rewarding genuine performance. When you have done a better job than your colleagues this month, you have earned your reward. The next month, someone may do a better job than you, and they will earn theirs. For me, this is what incentives should be all about – not just some free-for-all to keep everyone happy.

There are some pretty unbelievable incentives out there in the corporate world. What would make you get off your seat and make the unimaginable happen?