Wednesday, May 26, 2010

Pay ≠ Motivation

I was once asked if improving motivation increases productivity. Which then prompted a series of questions: Can we improve motivation? And, is there a level at which motivation is maxed out? Should we try to find each employee's threshold?

In reality, we do not seek to "improve" motivation, but rather to create innovative compensation systems that naturally tap into the ways that people like to be rewarded. Which in turn will more likely lead to improved satisfaction.

An individual's interest/reward profile is only one piece of the performance puzzle--others include characteristics such as diligence, ambition, and role-fit. However, assessing what drives a person and how they like to be rewarded provides a framework for task assignment and incentives that maximize team member interests.

Sure, financial incentives are the traditional reason for being employed. However, these alone will not increase productivity and may even decrease it over time.

Stepping back for a moment, one way to conceptualize the relevance of personality to work is to classify jobs by occupational type and then consider the personality requirements and performance criteria relevant to that occupational type.

Top vocational psychologist John Holland's occupational choice model established a general classification system for personality styles. These styles are classified into six categories based on patterns of interests and are linked to a classification structure that organizes occupations according to similar traits.

If we take two vocational types and compare them, we can elucidate how rewards systems can naturally vary. First, let's work under the assumption that two individuals are incented equally by the payroll. Bill is V.P. of Audits; Jack is V.P. of Sales. Picturing these two men sitting across the table from each other, we can imagine that they would approach their work quite differently. Bill is likely more organized, task-focused and slightly introverted. Jack is likely a maverick who switches gears easily, people-focused, and extraverted.

Thus, if we paid Jack significantly more money to be an auditor, would he be more productive? And vice-versa with Bill? Not necessarily. Because, again, there are many facets at play in a person's performance arc.

So, what would these two guys find to be motivating? A job and environment they find pleasing with an incentive system that rewards them in ways that matter to them. Which for Bill might include opportunities to participate in sessions on financial planning, college funding and the like, the latest state of the art software, and/or a private work space where he can bunker down and get things done. Alternatively, Jack might really prefer to be rewarded with public limelight for meeting his goals, with extra days off, and/or opportunites to develop creative strategies with the marketing team.

It is important to understand that managers have much greater flexibility and ability in this area than they often believe. When a person’s compelling individualized needs are being met, it is more likely that positive performance will result. Assuming that other business needs and behavior trends are appropriately tended to, a culture and reward system that serves to "actually reward" versus "hope to reward" will lead to a happier and more loyal work group. And a happier and more loyal work group will most assuredly produce.